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
