MACRO 1/22 - Supply and Demand: Understanding Supply Curve Dynamics

These flashcards cover key vocabulary and concepts related to the dynamics of the supply curve as discussed in the lecture.

Supply Curve

A graph showing the relationship between the price of a good and the quantity supplied.

Upward Sloping

Describes a supply curve that indicates that as prices increase, the quantity supplied also increases.

Incentive to Produce

The motivation for firms to produce more due to an increase in potential profits.

Shift to the Left of Supply Curve

Indicates a decrease in supply, meaning at any given price, the quantity supplied is lower.

Shift to the Right of Supply Curve

Indicates an increase in supply, meaning at any given price, the quantity supplied is higher.

Profit

The difference between total revenues and total costs for a firm.

Input

Any resource used in the production process, such as labor, materials, or equipment.

Cost of Production

The total cost incurred by a firm in producing goods or services, including wages and materials.

Technological Change

The process of developing new methods or tools to improve production efficiency.

Negative Technological Change

A situation where production becomes less efficient, often due to regulations or restrictions.

Decrease in Input Prices

When the cost of inputs goes down, leading to an increase in the quantity supplied at any given price.

Increase in Input Prices

When the cost of inputs goes up, resulting in a decrease in the quantity supplied at any given price.