MICROECONOMICS PRATICE PROBLEMS from pratice problems 1.1/1.2
Fixed costs are those costs that
don't vary when you change the quantity of output you produce.
Complements-in-production are
goods that are produced together
The supply curve is upward-sloping because:
the marginal cost curve is upward-sloping.
_____ are alternative uses of your production capacity.
Substitutes-in-production
When a supply curve shifts to the _____, this means the market would supply _____ quantity at each and every price.
right; a larger
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
With price-takers, suppliers
take the market price as given and just follow along
_____ is a graph plotting the quantity of an item that a business plans to sell at each price.
Individual supply curve
_____ is the increase in output that arises from an additional unit of an input, like labor.
Marginal product
By applying the Rational Rule for Sellers, the firms can maximize the profits by continuing to produce until:
Price = Marginal cost.
A shift of the supply curve to the left means that there is:
a decrease in supply.
If your firm sells a product in a market with _____ sellers or _____ buyer(s), it's likely that your firm can have an important influence on the price.
a few; a few
a firm will be less profitable when it increases the quantity supplied.
a firm will be less profitable when it increases the quantity supplied.
Substitutes-in-production are:
alternative uses of your production capacity
A shift of the supply curve to the right means that there is:
an increase in supply.
A perfectly competitive market is a market in which all firms in an industry sell a(n) _____ good, and there are _____, each of whom is small relative to the size of the market.
identical; many buyers and sellers
Marginal product is the _____ in output that arises from an additional unit of an _____, like labor.
increase, input
Productivity growth allows businesses to _____ and is a key force that firms can reduce their marginal costs through time.
produce more outputs using fewer inputs
The _____ reminds you that your best choice as a seller depends on many other factors beyond price.
interdependence principle
When your firm produces an additional unit, the _____ is simply the amount of money you'll get from selling.
marginal benefit
Companies should keep expanding production if the price continues to be at least as large as the _____.
marginal cost
When your suppliers increase the prices of your inputs, they increase your _____, and this will shift your supply curve to _____.
marginal costs; the left
Lower marginal costs make it _____ to the firms to sell a _____ quantity at any given price.
more profitable; larger
A shift in the supply curve is a:
movement of the supply curve itself
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
Managers in perfectly competitive markets don't spend a lot of time strategizing about _____ because _____.
price; their best price is the market price
Marginal costs include:
variable costs
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
