Econ 201 Ch 3 Practice Quiz

only variable costs.

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

200 units

(Figure: Spice King Burgers' Supply Curve) Take a look at Spice King Burgers' supply curve for burgers. How many burgers will they supply at a market price of $1.50 per burger? 400 units 300 units 500 units 200 units

Diminishing marginal product

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? The marginal principle The opportunity cost principle Diminishing marginal product The cost-benefit principle

20 million gallons per week

Consider the data in the table. The price of gasoline is $3.99 per gallon at the gas station. If Rexhall Fuel Supplies is a rational seller, how many gallons of gasoline should this seller be willing to sell? 30 million gallons per week 14 million gallons per week 42 million gallons per week 20 million gallons per week

a fall in the price of the item.

In the graph, the movement from point J to point K must have been caused by: a fall in the price of the item. a rise in the price of the item. an increase in the total supply of the item. a decrease in the total supply of the item.

A. 3 B. 5 C. more if the price is greater

Miker, a manufacturer of generic medications, is deciding how much to charge retailers for their generic acetaminophen (Tylenol). The marginal cost for each bottle is provided in the accompanying table. Quantity of acetaminophen (thousand bottles) / Marginal cost (per bottle) 1 / $6.00 2 / $7.00 3 / $7.75 4 / $8.25 5 / $9.00 6 / $9.50 If the price of a bottle is $7.75, how many thousand bottles would Mike produce each day? What about if the price is $9.00 per bottle? A. Production at $7.75: ____ thousand bottles B. Production at $9.00: ____ thousand bottles Use the Rational Rule for Sellers in Competitive Markets to help explain why the values are different: The rational rule for sellers in competitive markets says to sell ______ than (or is equal to) the marginal cost. Finally, draw Miker's individual supply curve by placing the points in the accompanying graph.

greater than or equal to the marginal cost.

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. less than the marginal benefit. greater than or equal to the marginal benefit. less than the marginal cost.

A rise in input prices; a decrease in the number of sellers in the market; a rise in the price of a substitute-in-production.

Which of the following lists only the factors that would cause a decrease in the supply of an item? A decrease in the number of sellers in the market; a fall in the price of a complement-in-production; an increase in productivity. A fall in input prices; an increase in productivity; a fall in the price of a substitute-in-production. A rise in the price of a substitute-in-production; a rise in the price of a complement-in-production; an expectation that the price of the item will rise in the future. A rise in input prices; a decrease in the number of sellers in the market; a rise in the price of a substitute-in-production.

American Airlines determines the marginal cost of an extra passenger to be $75 and sells a discount seat for $250.

Which of the following scenarios depicts a seller who is following the Rational Rule for Sellers? Mindy sets up a lemonade stand and calculates the cost of an additional cup of lemonade at 50 cents, and sells it for 25 cents. An auto-rickshaw driver in New Delhi, India, calculates a trip to have a marginal cost of 350 rupees and accepts a ride request for 315 rupees. 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 determines the marginal cost of an extra passenger to be $75 and sells a discount seat for $250.

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

Why are supply curves typically upward-sloping? 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. They slope upward due to the law of demand. They slope upward because sellers demand more when prices are lower.

Graph A

A coffee shop opens next to an existing coffee shop. Which of the following graphs shows the effect of this new coffee shop on the market supply curve for coffee in this area? Graph A Graph B Graph D Graph C

multiply the individual supply of one of the suppliers by ten.

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

Len, Ren, and Jen

The accompanying table provides data for five different oatmeal cookie sellers. Out of the sellers listed, who all are following the law of supply? Ken and Ben Ren only Len, Ren, and Jen Len, Ken, Ren, and Ben

The quantity supplied in the market falls by 149,000.

There are four suppliers in the packed meals market. The quantity of packed meals that each one is willing to supply per week at various prices is provided in the accompanying table. What is the change in the market supply for packed meals when the price falls from $6.25 per meal to $6.00 per meal? The quantity supplied in the market rises by 149,000. The quantity supplied in the market falls by 149,000. The quantity supplied in the market rises by 152,000. The quantity supplied in the market falls by 165,000.

The quantity supplied in the market rises by 152,000.

There are four suppliers in the packed meals market. The quantity of packed meals that each one is willing to supply per week at various prices is provided in the accompanying table. What is the change in the market supply for packed meals when the price rises from $6.25 per meal to $6.50 per meal? The quantity supplied in the market falls by 132,000. The quantity supplied in the market falls by 165,000. The quantity supplied in the market rises by 152,000. The quantity supplied in the market rises by 132,000.

vary with the quantity of output produced.

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

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

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

the quantity supplied goes on the horizontal axis.

When plotting a supply curve the quantity supplied goes on the vertical axis. the price goes on the horizontal axis. the quantity demanded goes on the vertical axis. the quantity supplied goes on the horizontal axis.

(i), (iii), and (iv)

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), (ii), and (iii) (i), (iii), and (iv) (ii) and (iv) (i), (ii), (iii), and (iv)

Graph D

Which of the following graphs shows what will happen to the supply curve for luxury SUVs, if economists predict an increase in demand for these vehicles? Graph B Graph C Graph D Graph A

The market price of a product.

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