supply review economics mr. bordelon. key terms an expense that costs the same whether or not a...

SUPPLY REVIEWEconomicsMr. Bordelon

Key Terms

An expense that costs the same whether or not a firm is producing a good or service.

Key Terms

An expense that costs the same whether or not a firm is producing a good or service. Fixed cost

Key Terms

The income that the supplier receives from selling one more unit.

Key Terms

The income that the supplier receives from selling one more unit. Marginal revenue

Key Terms

A tax on the sale or manufacture of a good.

Key Terms

A tax on the sale or manufacture of a good. Excise tax

Key Terms

A measure of how suppliers will respond to a change in price.

Key Terms

A measure of how suppliers will respond to a change in price. Elasticity of supply

Key Terms

A government payment to support a business or market.

Key Terms

A government payment to support a business or market. Subsidy

Key Terms

The tendency of suppliers to offer more of a good at a higher price.

Key Terms

The tendency of suppliers to offer more of a good at a higher price. Law of supply

Key Terms

The additional cost of producing one more unit of output.

Key Terms

The additional cost of producing one more unit of output. Marginal cost

Key Terms

Supply schedule Regulation Variable costs

Main Ideas

How does the marginal product of labor change as more people are hired?

Main Ideas

How does the marginal product of labor change as more people are hired? Marginal product of labor increases up to a

certain point. Once that point is reached, however, total output still increases, but at a decreasing rate. Diminishing returns.

Main Idea

What categories of costs combine to create a firm’s total cost?

Main Idea

What categories of costs combine to create a firm’s total cost? Fixed costs and variable costs combine to

create total cost. Fixed costs are costs that are the same no matter how much is produced. Variable costs rise or fall depending on the quantity produced.

Main Ideas

Name and describe three factors that can cause a change in supply.

Main Ideas

Name and describe three factors that can cause a change in supply. Changes in input costs Future expectations Technological changes Government subsidies, taxes, and

regulations Imports and exports

Main Idea

What circumstances cause a firm to experience diminishing marginal returns?

Main Idea

What circumstances cause a firm to experience diminishing marginal returns? Diminishing marginal returns occur when

output declines with each additional unit of labor. They generally result when the supply of capital does not increase with the work force, such as when there are not enough machines or tools or supplies for added workers to use.

Main Ideas

How can the global economy affect the supply of a good in the United States?

Main Ideas

How can the global economy affect the supply of a good in the United States? Increases in wages, technological

innovation, or trade restrictions will affect supply of goods to the United States.

Main Ideas

To maximize costs, marginal revenue should be equal to ______.

Main Ideas

To maximize costs, marginal revenue should be equal to marginal cost.

Critical Thinking

Assume that a $1 per pound tax has been placed on fish. What effect will this have on the supply curve for fish?

Critical Thinking

Assume that a $1 per pound tax has been placed on fish. What effect will this have on the supply curve for fish? Supply curve will move to the left.

Compare

What is the difference between increasing marginal returns and decreasing marginal returns?

Compare

What is the difference between increasing marginal returns and decreasing marginal returns? Increasing marginal returns occur when

there is an investment in the business, and the marginal product of labor increases as the number of workers increases.

Decreasing marginal returns occur when there is an investment in the business, and the marginal product of labor decreases as the number of workers increases.