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1) the price offered
2) the opportunity costs of alternative uses of your time
2) the opportunity costs of alternative uses of your time
answer
Your willingness to supply (think 'work') depends on
question
marginal cost
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the additional opportunity cost of increasing quantity supplied,
for work analogy: additional opportunity cost of alternative uses of your time
for work analogy: additional opportunity cost of alternative uses of your time
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least, valuable
answer
You give up the _______ valuable time first, and continue giving up increasingly ____________ time as the price you are offered
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increases
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As a supplier, marginal cost, the minimum you need to be paid, ______________ as you supply more
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dollars received, opportunity cost (like alternatives uses of time than working)
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As a supplier, marginal benefit is measured in ______________ and marginal cost is __________________
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opportunity costs
answer
All marginal costs are ultimately...
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the best alternative use of that input
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The real cost of any input is determined by
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not marginal opportunity costs and have no influence on smart choices
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Past expenses are
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sunk costs
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past expenses that cannot be recovered
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supply
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the overall willingness of businesses (or individuals) to sell a particular product or service because the price covers all opportunity costs of production
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quantity supplied (TOTALLY RELIANT ON PRICE)
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the quantity you actually plan to supply at a given price
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give up/get
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opportunity cost =
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1 fingernail set
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If Paola can do 1 piercing and in doing so, give up 1 fingernail set, what is her opportunity cost?
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inputs are not equally productive in all activities (think better and worse fingernail painters)
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Increasing marginal opportunity costs arise because
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inputs are equally productive in all activities
answer
marginal opportunity costs are constnat when
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market supply
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sum of supplies of all businesses willing to produce a particular product or service
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law of supply
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if the price of a product or service rises, quantity supplied increases
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supply curve
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shows relationship between price and quantity supplied, other things remaining the same
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over and down
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how to read the supply curve as a supply curve?
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up and over
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how to read the supply curve as a marginal cost curve?
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tells you quantity businesses are willing to supply
go to price first, then look down to see how much a business will supply at that price
go to price first, then look down to see how much a business will supply at that price
answer
reading a supply curve
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tells you the minimum price businesses will accept that covers all marginal opportunity costs of production
go to quantity first, then look over to see how much a business will accept for the unit of production
(how much they will accept for the 50TH thing)
go to quantity first, then look over to see how much a business will accept for the unit of production
(how much they will accept for the 50TH thing)
answer
reading a marginal cost curve
question
1) if the price of a product or service changes, that affects QUANTITY SUPPLIED - represented graphically by moving along an unchanged supply curve
2) if ANYTHING ELSE changes, that affects SUPPLY - represented graphically by a shift of the entire supply curve
2) if ANYTHING ELSE changes, that affects SUPPLY - represented graphically by a shift of the entire supply curve
answer
two kinds of change in supply
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1) technology
2) environment
3) prices of inputs
4) prices of related products or services produced
5) expected future prices
6) number of businesses
TEPPEN
2) environment
3) prices of inputs
4) prices of related products or services produced
5) expected future prices
6) number of businesses
TEPPEN
answer
Six ways to change supply and shift the supply curve
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increase in market supply, shifts supply curve to the right
answer
better tech for businesses?
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increase in supply
(happens w new tech)
rightward shift of supply curve
(happens w new tech)
rightward shift of supply curve
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increase in business's willingness to supply
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decreases
answer
Negative environmental change __________ supply
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increases
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Positive environmental change __________ supply
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increases
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A fall in the price of inputs ___________ supply
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decreases
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A rise in the price of inputs ___________ supply
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produce an increased supply of alternative products or services
lower price for fingernails? provide more piercings to maximize benefit (dollars)
lower price for fingernails? provide more piercings to maximize benefit (dollars)
answer
lower prices for a related product or service (fingernail sets and piercings) causes businesses to
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decrease in supply
(happens w relations to other related products and services: rise in price of fingernail sets decreases the supply of piercings)
leftward shift of supply curve
(happens w relations to other related products and services: rise in price of fingernail sets decreases the supply of piercings)
leftward shift of supply curve
answer
decrease in business's willingness to produce
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increases
answer
A fall in expected future price _________ supply today
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decreases
answer
A rise in expected future price ____________ supply today
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increases
answer
An increased number of businesses __________ supply
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decreases
answer
A decreased number of businesses ______________ supply
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decreases
answer
A rise in price of a related product or service _____________ supply
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increases
answer
A fall in price of a related product or service _____________ supply
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