Chapter 6
What is the monetary value of a product or service known as?
Price
________ refers to the amount of a product offered for sale at all possible prices in a market.
Supply
How many stages of production are there?
3
Name 4 of the supply shifters.
Subsidies, Taxes, Cost of production, technology, productivity, Govt Regulations, Number of sellers and Expectations.
This occurs when the quantity supplied of an item is greater than the quantity demanded at a given price.
Surplus
Prices sometimes act as signals to both buyers and sellers. What do abnormally higher prices signal buyers to do
Buy less.
A graph that shows the quantities supplied at each and every possible price in the market is known as a
Supply curve
The extra output, or change in total product caused by adding one more unit of variable input is known as?
Marginal Product
The introduction of a new machine or industrial process to help increase supply of a product would be classified under which of the supply shifters?
Technology
__________ is a method by which the government allocates goods and services without prices.
Rationing
What are the 4 advantages of the price system?
Flexibility, Neutrality, Familiarity, and Efficiency.
True or False: The stages of production measure the effects of workforce size on marginal product.
True
Which stage of production is known to have increasing marginal returns?
Stage 1
Today, many farmers in the milk, cotton, corn and wheat industries receive payments from the federal government that serves as an incentive for them to produce more. These payments are known as ______
Subsidies
This takes place when the quantity demanded of an item is greater than the quantity supplied at a given price.
Shortage
On a supply and demand curve, the point at which both curves intersect is known as the ________
Equilibrium
True or False: The third stage of production is distinguished by an increase in output.
False
What stage of production do businesses wan t to operate in?
Stage 2
When looking at the shifters of supply, businesses consider taxes as part of their _______ of ________, just like raw materials and labor.
cost of production
Imagine you run a business. You are determining whether or not you should hire, or fire, more workers. What would you use to analyze your production, and what specific economic term would you look at during this analyzation?
Production function/schedule and Marginal product.
What is the minimum legal price a seller can charge known as?
Price floor
What would most economists use to study how production of a firm changes as more units of labor are introduced?
Production function/schedule
In stage three of production, production decreases, leading to negative marginal returns. What is the most likely solution for businesses it this situation?
Fire workers etc.
Safety rules get reduced by the government on the production of cars. This results in the manufacturers production costs to decrease, leading to an increase in production. Which of the shifters would this scenario be classified as?
Government regulations
the cost of an item when the amount purchased matches the amount produced.
Equilibrium price.