| A | B |
|---|
| Tax | required payment to the government |
| Subsidy | payment to private businesses by the government |
| Regulation | rules passed by the government about how companies conduct business |
| resource prices | anything used in the the production of a good or service. |
| government tools | taxes, subsidies and regulation |
| technology | usually makes production less in turn more supply and profits |
| competition | increases supply |
| prices of related goods | changes in one product's price can affect another |
| producer expectations | decisions producers make based on future income and projections |
| Marginal product | Total output of a product. |
| Marginal product | The change in output generated by adding one more unit of input. |
| Law of diminishing returns | The effect that varying the level of an input has on total and marginal product. |
| Fixed Costs | Production costs that don’t change no matter how many goods are made. |
| Depreciation | Lessening of value, on each and every capital good. |
| Overhead | A company’s total fixed costs. |
| Variable costs | Change as the level of output changes. Variable costs include: raw materials and wages. |
| Total costs | The sum of the fixed and variable production costs. |
| Marginal costs | The additional costs of producing one more unit of output. |
| supply | The quantity of goods and services that producers are willing and able to ofer at various possible prices during a given time |
| quantity supplied | Amount of a good or service that a producer is willing to sell at each particular price. |
| law of supply | Producers supply more goods/services when they can sell them at higher prices and fewer goods/services at lower prices. |
| profit motive | The desire to make money. |
| profit | The amount of money remaining after producers have paid all of their costs. |
| cost of production | Costs include: wages,salaries,rent, interest on loans, bills, raw materials and any other goods/services used to make a product. |
| supply schedule | Lists each quantity of a product that producers are willing to supply at various market prices. |
| supply curve | Plots on a graph the information from a supply schedule. |
| elasticity of supply | The degree to which the price changes affect the quantity supplied. |
| elastic supply | Exists when a small change in price causes a major change in the quantity supplied. |
| inelastic supply | Exists when a change in a good's price has little impact on the quantity supplied. |
