Chapter 5 Econ

a condition of rising prices

inflation

how do government regulations usually affect supply? why?

restrict/prohibit-left allow/require-right

how do increased taxes affect the supply of goods and services?

shifts it to the left

when the price of a product goes down, what happens?

some producers produce less, and others drop out of the market

a government can increase supply by giving _______ to producers

subsidy

a government payment that supports a business or market

subsidy

a graphical representation of a supply schedule

supply curve

what will a firm do if the cost of its labor and resources goes up?

supply curve goes left

how does new technology effect supply

supply curve goes right

an increase in supply at every price

supply curve shift

relationship between price and total quantity supplied by all firms

supply schedule

the cost of bringing raw materials to a production facility and sending finished products to stores

transportation cost

T/F The output of a good increases as the price of the good increases

true

t/f elasticity of supply tends to be inelastic in the short run because it is difficult to expand capacity to in crease production

true

t/f services tend to be more elastic than goods, in the short run

true

a factor that can change

variable

T/F A supply curve shows price and quantity in a table

False

T/F Price and quantity supplied are variables on a supply schedule

True

why do businesses that make bulky products locate themselves near consumers?

cheaper transportation

a measure of how suppliers react to a change in price

elasticity of supply

payment to the government on the production or sale of a good

excise tax

to reduce supply, a government might place a(n) _______ ___ on a product

excise tax

t/f raising price on a supply curve will cause the curve to shift left

false

When a new type of expensive car all of a sudden becomes very popular, what will the elasticity of supply be like in the short run? long run?

inelastic elastic

what is a supply scheduled characterized by

it lists quantity supplied at all various price price points for a specific good

the principle that the higher the price, the larger the quantity produced

law of supply

When the price of T-shirts drops, what actions will T-shirts take?

offer less pizza

When the price of pizza goes up, what will pizza shops do?

offer more pizza

how do subsidies affect the cost of production

pay -> remove<-

how much of a good is offered for sale at a specific price

quantity supplied

GOVERNMENT INTERVENTION in a market affects that price, quantity, or quality

regulation