Econ ch.5
QUESTION: According to the law of supply, when prices increases,
ANSWER: quantity supplied increases
QUESTION: Which of the following is a variable cost?
ANSWER: raw materials to make product
QUESTION: FROM THE HAMBURGER SUPPLY CURVE GRAPH, On curve S1, when the price is $2.50, what is the quantity supplied?
ANSWER: 300
QUESTION: A small grocery store makes several technological changes. Which one will improve labor productivity?
ANSWER: Replace old cash registers with UPC scanners.
QUESTION: The additional expense of producing one more unit of a product is called
ANSWER: marginal cost
QUESTION: What motivates producers to increase supply?
ANSWER: profit
QUESTION: Which of the following is most likely to improve labor productivity?
ANSWER: providing training for workers
QUESTION: How does a business calculate total profit?
ANSWER: total revenue minus total cost
QUESTION: Which of the following examples demonstrates elastic supply?
ANSWER: A CD fails to be a hit, stores discount it by 30 percent, and the recording company lowers production by 50 percent.
QUESTION: Which of the following is an example of input costs affecting supply?
ANSWER: A toy maker reduces production because the price of lead-free paints rises.
QUESTION: FROM THE HAMBURGER SUPPLY CURVE GRAPH, What conclusion can you draw from this supply curve?
ANSWER: An increase in the number of producers increased supply.
QUESTION: Which of the following is an example of supply?
ANSWER: Ann has a commercial oven and bakes wedding cakes for friends.
QUESTION: Which of the following is an example of producer expectation affecting supply?
ANSWER: As oil prices rise, a bicycle factory increases production levels.
QUESTION: What happens when businesses hire too many workers?
ANSWER: Employees get in each other's way, causing disorganization and inefficiency. Abdi says too many cooks in the kitchen.
QUESTION: FROM THE HAMBURGER SUPPLY CURVE GRAPH, On curve S2. when price changes from $4.00 to $1.50, how does quantity supplied change?
ANSWER: It decreases by 500.
QUESTION: Why do businesses want to know what their profit-maximizing output is?
ANSWER: It is the point at which each unit produced is earning the highest possible profit.
QUESTION: Which of the following is a fixed cost for a steel mill?
ANSWER: The chief financial officer is paid a sal
QUESTION: Manju opens the first Indian restaurant in her city, and it is a success. How will her success most likely affect the number of producers?
ANSWER: Two more Indian restaurants will open, but because of the limited number of customers, one will eventually fail.
QUESTION: Why do small businesses often become more efficient when they add workers?
ANSWER: Workers specialize and divide tasks.
QUESTION: Which of the following businesses is most likely to have an inelastic supply?
ANSWER: a contractor that builds highways
QUESTION: Which of the following producers is most likely to have an elastic supply for its product?
ANSWER: a hot dog stand
QUESTION: Who is a producer?
ANSWER: a provider of goods or services
QUESTION: What is the most likely outcome when the number of producers of a particular product rises?
ANSWER: an increase in supply
QUESTION: The appearance of a supply curve is
ANSWER: an upward slope, bottom left to top right
QUESTION: Car manufacturers who use robots to do certain jobs on the assembly line are trying to increase supply by
ANSWER: applying new technology
QUESTION: Which item shows all fixed costs?
ANSWER: business licences, insurance, mortgage
QUESTION: You own a small bakery that supplies cheesecakes to local restaurants. Which of the following actions is most likely to help you increase supply quickly?
ANSWER: buy a new oven that bakes more cheesecakes simultaneously
QUESTION: How is marginal cost calculated?
ANSWER: change in total cost divided by change in total product
QUESTION: A business that discovers a decline in profit can best solve the problem by
ANSWER: creating a production costs and revenues schedule to find the profit-maximizing output
QUESTION: The government uses excise taxes to
ANSWER: decrease the supply of products it doesn't want people to use
QUESTION: Which of the following lists contain only variable costs for an automobile factory?
ANSWER: electricity to run drills, wages, windshields
QUESTION: Which of the following are examples of government actions?
ANSWER: excise tax, regulation, subsidy
QUESTION: Total cost is the sum of
ANSWER: fixed costs and variable costs
QUESTION: The difference between fixed costs and variable costs is that
ANSWER: fixed costs remain the same; variable costs depend on how much is produced
QUESTION: The ease of changing production to respond to price change determines
ANSWER: how elastic a supply is
QUESTION: The amount of goods and services that a person can produce in a given time is called
ANSWER: labor productivity
QUESTION: The change in total output that results from hiring one additional worker is called
ANSWER: marginal product
QUESTION: FROM THE HAMBURGER SUPPLY CURVE GRAPH, What factor that affects supply does this graph illustrate?
ANSWER: number of producers
QUESTION: Supply curves are created using the assumption that all economic factors remain constant except a. demand
ANSWER: price
QUESTION: Business owners decide on the right number of workers by analyzing data to learn when
ANSWER: profit-maximizing output is reached
QUESTION: What is the most common reason for supply to be inelastic?
ANSWER: the difficulty of changing the amount produced
QUESTION: What does a marginal product schedule show?
ANSWER: the relationship between labor and marginal product
QUESTION: A supply schedule is related to a supply curve because
ANSWER: the supply curve shows the data from the supply schedule in graphic form
QUESTION: Supply is defined as
ANSWER: the willingness and ability of producers to offer goods and services for sale
QUESTION: Which of the following is most likely to have elasticity of supply for their product?
ANSWER: wedding-cake baker