Macro- Chapter 3 Part 2
If an oil refinery can supply 2 million gallons per week when the price is $2 per gallon, what will be the market quantity supply for 50 refineries having the same supply decisions?
100 million gallons
The individual supply curve is _____ meaning that when the price _____, the quantities supplied would _____.
upward sloping; increases, increase
A shift of the supply curve to the right means that there is:
an increase in supply
When your suppliers increase the prices of your inputs, they increase your _____, and this will shift your supply curve to _____.
marginal costs; the left
The supply curve is upward-sloping because:
the marginal cost curve is upward-sloping.
The independence principle tells the sellers that there are many other factors beyond price that can either increase or decrease the market supply. Under this circumstance, you would see that:
the supply curve shifts either to the left or to the right.
The interdependence principle reminds us that:
things other than price can influence your supply.
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.
When your selling price is _____the marginal cost, you would neither increase nor decrease your profits.
exactly equal to
A shift in the supply curve is a:
movement of the supply curve itself.
Higher marginal costs mean that firms will no longer be profitable to produce:
as large a quantity at any given price.
If an oil refinery can supply 5 million gallons per week when the price is $1 per gallon, what will be the market quantity supply for 40 refineries having the same supply decisions?
200 million gallons
Fixed costs are those costs that:
don't vary when you change the quantity of output you produce.
To distinguish between movements along a supply curve and shifts in supply curves, if the only thing that's changing is the price, then you're thinking about:
a movement along the supply curve.
When graphing the supply curve, we focus on how a _____ affects quantity supplied while other variables _____.
change in price; remain constant
Your supply of a good will _____, shifting the supply curve to the left, if the price of a substitute-in-production _____.
decrease; rises
We usually consider _____ to be motivated by a desire by consumers to maximize economic surplus, while businesses on the _____ side are trying to maximize profits.
demand; supply
Companies should keep _____ for as long as the price continues to be _____ marginal cost.
expanding production; as large as
The Rational Rule for Sellers is important but does NOT:
tell sellers how to set the price against the competitors.