ECON 2303 LC3 CH.3: Supply: Thinking Like a Seller
If an oil refinery can supply 2 million gallons per week when the price is $3 per gallon, what will be the market quantity supply for 10 refineries having the same supply decisions?
20 million gallons
The Rational Rule for Sellers is important but does NOT:
tell sellers how to set the price against the competitors.
The tendency for quantity supplied to be higher when the price is higher is called:
the law of supply
The supply curve is upward-sloping because:
the marginal cost curve is upward-sloping.
If all individual supply curves don't shift aftera price change, the market supply
will not shift
The answer to the question, "Should I produce one more unit?" depends on the balance of _____ and _____.
marginal benefits; marginal costs
In a(n) _____, all firms sell an identical good and there are a lot of buyers and sellers whose sizes are relatively small compared to the size of the market.
perfectly competitive market
When existing businesses leave the market, they _____ the total quantity supplied at each price, shifting the supply curve to _____.
decrease; the left
If the price of gas is $1 per gallon, how many gallons will be supplied per week?
10 million gallons
If the price of gas increases from $1 to $5, the quantity of gas supplied per week would change from _____ gallons to _____gallons.
10 million; 30 million
If the price of gas is $2 per gallon, how many gallons would be supplied per week?
15 million gallons
If the price of gas is $4 per gallon, how many gallons would be supplied per week? 25
25 million gallons
If the price of gas falls from $4 to $2, the quantity of gas supplied per week would change from _____ gallons to _____ gallons.
25 million; 15 million
_____ are goods that are made together.
Complements-in-production
When you change the quantity of output you produce, _____ costs will not vary with the units of outputs.
Fixed
Your _____ is also your marginal cost curve, and so anything that will change your marginal costs will shift your _____.
Decrease ; shift to the left
_____ are alternative uses of your production capacity.
Substitutes-in-production
Substitutes-in-production are:
alternative uses of your production capacity.
The interdependence principle reminds you that your best choice as a seller:
depends on many other factors beyond price.
A shift in the supply curve is a:
movement of the supply curve itself.
When following the Rational Rule for Sellers in Competitive Markets, it is NOT true that:
your supply curve is downward-sloping because of rising marginal costs.
To distinguish between movements along a supply curve and shifts in supply curves, if market conditions other than price change, you need to think about:
shifts in the supply curve.
When your suppliers increase the prices of your inputs, they increase your _____, and this will shift your supply curve to _____.
marginal costs; the left
An individual supply curve is a graph plotting the:
quantity of an item that a business plans to sell at each price.
Your _____ is also your marginal cost curve, and so anything that will change your marginal costs will shift your _____.
supply curve; supply curve
A shift of the supply curve to the right means that there is:
will shift also.
When market conditions change, each firm responds by changing its supply. When all individual supply curves shift, the market supply curve:
will shift also.