Download Supply Understanding Supply

Economic Survey A
Mr. Rubin de Celis
Chapter 5 – Supply vocabulary review
Supply
Understanding Supply
1. What is the tendency of suppliers to offer more of a good at a higher price?

quantity supplied

supply
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law of supply
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elasticity of supply
2. Why would the supply curve of a dog walking business be considered elastic?
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because it can hire workers quickly if the price rises
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because the supply of dog walking isn't easily expanded or reduced
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because the supply of dogs changes quickly
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all of the above
3. The measure of the way quantity supplied reacts to a change in price is

quantity supplied.
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supply.
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consumer demand.
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elasticity of supply.
4. A raise in the price of a product
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causes firms to decrease production.
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causes a decrease in supply.
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increases competition.
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decreases competition.
5. Any factor that can change is
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supply.
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a variable.
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a supply curve.
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a supply schedule.
6. What is needed to create a supply schedule for a fruit smoothie shop?
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a supply curve and the price other shops are charging
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the price charged and the number of smoothies supplied
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the number of other shops producing smoothies
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all of the above
7. What is a market supply schedule?
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a chart that lists how much of a good a supplier will offer at different prices
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a chart that lists how much of a good all suppliers will offer at different prices
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a graph of the quantity supplied of a good by all suppliers at different prices

a graph of the quantity supplied of a good at different prices
8. What factor might lead to the opening of several new pizzerias in a town?
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The price of a slice of pizza has gone up.
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The price of a slice of of pizza has gone down.
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The supply of pizza is inelastic.
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The cost of producing pizza has doubled.
9. If supply is elastic
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it is easier to predict changes in demand.
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producers respond slowly to changes in demand.
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it is unaffected by changes in price.
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it reacts strongly to changes in price.
10. What is a supply curve?
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a table that lists how much of a good a supplier will offer at different prices

a table that lists how much of a good all suppliers will offer at different prices
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a graph of the number of suppliers of a specific good
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a graph of the quantity supplied of a good at different prices
Supply
Costs of Production
1. How does a firm calculate its profit?
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marginal revenue minus marginal cost
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total revenue minus total cost
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variable cost plus total cost
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total revenue minus marginal revenue
2. The cost of producing one more unit of a good is known as a(n)

fixed cost.
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variable cost.
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operating cost.
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marginal cost.
3. A cost that does not change, no matter how much of a good is produced is a(n)
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fixed cost.
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variable cost.
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operating cost.
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marginal cost.
4. What does the beanbag factory experience when the number of workers is increased from 2 to 3?
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increasing marginal returns
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decreasing marginal returns
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a marginal product of labor
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a negative labor cost
5. The additional income from selling one more unit of a good, sometimes equal to price, is
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marginal revenue.
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increasing marginal returns.
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the marginal product of labor.
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a variable.
6. If the total cost of producing 300 leather jackets is $400 and the total cost of producing 301 leather
jackets is $435, what is the marginal cost of production at 300 leather jackets?
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$835
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$435
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$400
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$35
7. What is the level of output every firm strives for?
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when marginal revenue equals marginal cost
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when marginal revenue is greater than marginal cost
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when variable cost and marginal cost rise at the same rate
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when fixed cost and marginal cost are equal
8. Total cost is
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the cost of operating a facility, such as a store or factory.
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fixed costs plus variable costs.
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
a level of production at which the marginal product of labor decreases as the number or
workers increases.
the change in output from hiring one additional unit of labor.
9. If the fixed cost of producing video games is $14, and the variable cost of producing seven video games
is $12, how much is the total cost of producing seven video games?
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$2
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$7
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$21
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$26
10. A cost that rises or falls depending on how much is produced is a(n)
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fixed cost.
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variable cost.
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operating cost.
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labor cost
Supply
Changes in Supply
1. If a firm's product is perishable, where is the firm usually located?
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in a city
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near a river
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near its consumers
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location doesn't matter
2. Which of the following is a way entrepreneurs influence supply?
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subsidies
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technology
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regulation
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taxes
3. Which of the following will always cause a supply curve to shift to the left?
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advances in technology
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future expectations of falling prices
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excise taxes
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fewer inputs
4. A tax on the production or sale of a good is called
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income tax.
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a revenue tax.
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an excise tax.
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a subsidy.
5. What happens to supply when input costs go up?
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It decreases because the good becomes more expensive to produce.
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It increases because the good becomes cheaper to produce.
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It increases because the good becomes more expensive to produce.
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It decreases because consumers find a substitute product.
6. A government payment that supports a business or market is
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quantity supplied.
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a regulation.
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an excise tax.
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a subsidy.
7. Government intervention in a market that affects the production of a good is
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regulation.
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an excise tax.
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quantity supplied.
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an input cost.
8. Why would a farmer store his or her soybeans for future sale instead of selling them right after harvest?
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Inflation is running at 25 percent.
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The government imposes an excise tax effective next year.
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A new technology decreases the chance of rot.
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The government lifts restrictions on the importation of soy beans.
9. New advances in technology usually
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cause input costs to drop.
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increase supply at all price levels.
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cause the supply curve to shift to the right.
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all of the above.
10. What is a negative effect of the U.S. farm subsidies that pay farmers to take land out of cultivation?
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Less efficient farms must shut down because the subsidized farms are more efficient.
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Farmers use more pesticides on lands they do cultivate to make up for lost production.
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Farmers are paid less for their product.
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all of the above