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.