Macro Chapter 3 quiz
When you calculate marginal costs, they should include:
only variable costs
Which of the following are correct about fixed costs? (i) They do not change with the level of production in the short run.(ii) They include variable costs. (iii) They are present even when the firm is producing zero units. (iv) They are irrelevant to marginal cost.
(i), (iii), (iv)
Which of the following lists only the factors that would cause a decrease in the supply of an item?
A rise in input prices, a decrease in the numbers of sellers in the market, a rise In the price of substitute in-production
Which of the following scenarios depicts a seller who is following the Rational Rule for Sellers?
American airlines determine the marginal cost of an extra passenger to be $75 and sells a discount seat for $250
A bakery hires a baker who can make 15 cakes per day. The bakery then decides to hire a second baker who will use the kitchen at the same time as the first baker. The bakery finds that the second baker can produce only an additional nine cakes per day. What concept does this scenario illustrate?
Diminishing marginal cost principle
The Rational Rule for Sellers says that a seller should sell one more unit of an item if the price is:
Greater than or equal to the marginal cost
What is quantity supplied?
It is the amount of an item that a seller plans to sell at a particular price.
Which of the following is NOT a factor that can shift supply?
The market price of a product
When plotting a supply curve
The quantity supplied goes on the horizontal axis
Why are supply curves typically upward-sloping?
They slope upward because higher prices lead individual businesses to supply a larger and more businesses are willing to supply goods and services
Variable costs are the costs that
Vary with the quantity of output produced
A market consists of ten similar suppliers that are making the same supply decisions. To find the market supply of these ten suppliers, you:
multiply the individual supply of one of the suppliers by 10
