Micro chapter 3

When you're operating in a perfectly competitive market, your best strategy is to: a. control the market price b. charge a price similar to that of competitors c. sell a unique product d. supply more quantity of product than competitors do

charge a price similar to that of competitors

_____ is a graph plotting the quantity of an item that a business plans to sell at each price a. market demand curve b. individual supply curve c. market supply curve d. individual demand curve

individual supply curve

The market supply curve is a graph plotting the: a. quantity that an individual business plans to sell at each price b. marginal cost associated with each quantity c. total quantity of an item supplied by the entire market at each price d. summation of all the individual demand curves in a given market, showing the quantity demanded of the good by all individuals at varying price points

total quantity of an item supplied by the entire market at each price

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? a. 100 million gallons b. 2 million gallons c. 200 million gallons d. $100

100 million gallons

The interdependence principle reminds you that your best choice as a seller: a. is best made when your decisions reflect the opportunity cost b. is best made after you evaluate the full set of costs and benefits of any choice, and only pursue those whose benefits are at least as large as their costs c. is best made incrementally d. depends on many other factors beyond price

depends on many other factors beyond price

When your suppliers increase the prices of your inputs, the increase your _____, and this will shift your supply curve to _____. a. marginal costs; the right b. fixed costs; the left c. fixed costs; the right d. marginal costs; the left

marginal costs; the left

When your suppliers decrease the prices of your inputs, the decrease your _____, and this will shift your supply curve to _____. a. marginal costs; the right b. fixed costs; the left c. fixed costs; the right d. marginal costs; the left

marginal costs; the right

An individual supply curve is a graph plotting the: a. quantity of an item that someone plans to buy at each price b. quantity of an item that a business plans to sell at each price c. price sellers are willing to accept at different times d. total quantity of the item supplied by the entire market at each price

quantity of an item that a business plans to sell at each price

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: a. changes in fixed costs b. shifts in the supply curve c. a change in price d. a movement along the supply curve

shifts in the supply curve

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)

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? a. 200 million gallons b. 5 million gallons c. 400 million gallons d. $200

200 million gallons

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? a. diminishing marginal product b. the opportunity cost principle c. the cost-benefit principle d. the marginal principle

diminishing marginal principle

The Rational Rule for Sellers says that a seller should sell one more unit of an item if the price is: a. greater than or equal to the marginal benefit b. less than the marginal cost c. greater than or equal to the marginal cost d. less than the marginal benefit

greater than or equal to the marginal cost

If farmers begin using better fertilizers to grow corn, we would expect a(n) __________ in the supply of corn. a. small decrease b. no change c. large decrease d. increase

increase

Assuming everything else stays the same, an increase in the price of smartphones will _____ of smartphones a. increase the supply b. increase the quantity supplied c. decrease the quantity supplied d. decrease the supply

increase the quantity supplied

A market consists of ten similar suppliers that are making the same supply decisions. To find the market supply of these ten suppliers, you: a. find the average quantity produced by the ten suppliers b. take the individual supply of one supplier c. taken one-tenth of the individual supply of each supplier and add it up d. multiply the individual supply of one of the suppliers by ten

multiply the individual supply of one of the suppliers by ten

When you calculate marginal costs, they should include: a. only variable costs b. both the variable and fixed costs c. the market price of the product d. only fixed costs

only variable 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 a. perfectly competitive market b. identical market c. imperfectly competitive market d. perfect market

perfectly competitive market

All of the following can be classified as supply, EXCEPT: a. tutoring your friend b. working in a supermarket c. selling your cellphone on the internet d. taking an economics class at your college

taking an economics class at your college

When market conditions change, each firm responds by changing its supply. When all individual supply curves shift, the market supply curve: a. may or may not shift b. will shift also c. will not shift d. will reflect a change in price

will shift also

Which of the following scenarios depicts a seller who is following the Rational Rule for Sellers? a. An auto-rickshaw driver in New Delhi calculates a trip to have a marginal cost of 350 rupees and accepts a ride request for 315 rupees b. American Airlines determines the marginal cost of an extra passenger to be $75 and sells a discount seat for $250 c. Mindy sets up a lemonade stand and calculates the cost of an additional cup of lemonade at 50 cents and cells it for 25 cents d. Andy's diner finds that the marginal cost of a fish and chips meal is $7 and lists the item for sale at $6.50

American Airlines

What is quantity supplied? a. It is a graph that plots how much a seller produces at different points in time b. It is the amount of an item that a buyer is willing to buy at a particular price c. It is a graph that plots the quantities of an item that a seller plans to sell at different prices d. It is the amount of an item that a seller is willing to sell at a particular price

It is the amount of an item that a seller is willing to sell at a particular price

When are supply curves typically upward-sloping? a. They slope upward due to the law of demand b. They slope upward because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services c. They slope upward because sellers demand more when prices are lower d. They slope upward because sellers prefer to sell more when prices are lower

They slope upward because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services

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. a lot of; a lot of b. a lot of ; a few c. a few; a few d. a few; one

a few; a few

Substitutes-in-production are: a. goods that consumers always buy together b. goods that consumers can always substitute one for another c. goods that are made together d. alternative uses of your production capacity

alternative uses of your production capacity

Which of the following is NOT a factor that can shift supply? a. the price of a substitute-in-production b. the market price of a product c. the price of a complement in production d. the expected future price of a product

the market price of a product

When plotting a supply curve a. the prices goes on the horizontal axis b. the quantity supplied goes on the vertical axis c. the quantity supplied goes on the horizontal axis d. the quantity demanded goes on the vertical axis

the quantity supplied goes on the horizontal axis

Variable costs are costs that a. stay fixed with the quantity of output produced b. vary with the quantity of output produced c. are incurred to build factories and assembly plants d. are independent of the amount of output produced

vary with the quantity of output produced