chapter 5 quizlet

supply

the amount of goods available

quantity supplied

the amount a supplier is willing and able to supply at a set price.

law of supply

the idea that producers offer more of a good as its price increases and less as its price falls

variable

a factor that can change

market supply schedule

a chart that lists how much of a good all suppliers will offer at various prices

elasticity of supply

a measure of the way quantity supplied reacts to a change in price

inelastic supply

when an increase in price has little effect on the supply demanded

marginal product of labor

the change in output from hiring one additional unit of labor

increasing marginal returns

a level of production in which the marginal product of labor increases as the number of workers increases

diminishing marginal returns

a level of production at which the marginal product of labor decreases as the number of workers increases

fixed cost

cost that stays the same no matter how much is produced

variable cost

a cost that rises or falls depending on the quantity produced

total cost

the sum of fixed costs and variable costs

marginal cost

the cost of producing one more unit of a good

marginal revenue

the additional income from selling one more unit of a good

average cost

the total cost divided by the quantity produced

operating cost

the cost of operating a facility , such as a factory or store

regulation

when a government makes rules that affect the production of a good or service

excise tax

a tax placed on the creation or sale of a product

subsidy

a government payment that supports a business or market