chap 3
(Figure: Market for Printing Paper) Which of the following graphs shows what will happen in the market for printing paper if the price of printing paper rises?
Graph D
A seller in a perfectly competitive market cannot
raise the market price of a product
Diminishing marginal product leads to
rising marginal costs for a seller
(Figure: Spice King Burgers' Supply Curve) Take a look at Spice King Burgers' supply curve for burgers. How many burgers is Spice King Burgers willing to supply at a market price of $3.50 per burger?
600 units
(Figure: Market for Leather Wallets) Producers of hand-made leather wallets have made manufacturing changes that have improved quality but reduced efficiency. Which graph shows this change in the market?
Graph C
(Figure: Market for Drones) If companies frequently start using drones to deliver products, which graph shows the effect this will have on the market for drones.
Graph D
(Figure: Market for Luxury SUVs) 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 D
Over the past few years, the technology associated with producing flat-screen televisions has improved. This has led to a(n) _____ in the _____ flat-screen televisions.
increase; supply of
When trucking and transportation costs rise across the country, the price of processed and canned food
increases.
When making a profit-maximizing "how much" decision, if the price of a good or service is less than its marginal cost, the individual can maker herself better off by:
increasing the amount of the good or activity as long as the price of one more unit is less than the marginal cost.
When a firm experiences diminishing marginal product, its:
marginal product is falling but is likely still positive
Daisy is a milk farmer in a perfectly competitive market where there are many milk farmers. The market price of milk is $0.15 per gallon, which is also the marginal cost per gallon of milk. If Daisy charges $0.25 per gallon, she will
not sell any milk.
If the price of bananas is less than the marginal cost of bananas, then:
society's well-being can be improved if production decreases.
If the price of bananas is greater than the marginal cost of bananas, then:
society's well-being can be improved if production increases
Due to a decline in demand and popularity, Ford Motor Company is planning to phase out traditional sedans such as 'Fusion' and 'Taurus' to focus on SUVs and trucks. Ford's sedans and trucks/SUVs are
substitutes-in-production.
The Mile End Deli serves traditional delicatessen food in Brooklyn, New York. Which cost is MOST likely fixed at the deli?
the chairs customers sit on
Assuming that farmers can easily stock beef or pork, if the price of beef decreases, you can expect the:
supply of pork to increase
Yoghurt is an important ingredient in the production of frozen yoghurt. If the price of yoghurt increases, then one would expect, holding all other things constant:
the supply curve for frozen yoghurt to shift leftward.
Price takers
charge the prevailing prices and do not have any effect on the market price.
Diminishing marginal product occurs when:
each additional unit of an input adds less to total output than the previous unit.
Which influence will shift the supply curve?
expectations of a future decline in prices
A supply schedule shows:
how much of a good or service would be supplied at different prices.
In the market for barley, if the price of ethanol (which is made from corn, a crop that competes with barley for farmland) increases dramatically, the _____ barley would _____.
supply of; decrease
_____ illustrates an upward-sloping relationship between price and quantity.
A supply curve
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 falls by 149,000.
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), and (iv)
(Figure: Graph) In the graph, the movement from point E to point F represents
a decrease in quantity supplied
(Figure: Graph) In the graph, the movement from point M to point G represents
a decrease in supply.
Which factor would cause an INCREASE in the supply of light bulbs?
an advance in the technology of producing light bulbs
Which event shifts the supply curve for mint chocolate chip ice cream to the left?
an increase in the price of cream, an ingredient in ice cream
The Rational Rule for Sellers say that a seller should sell one more unit of an item if the price is:
greater than or equal to the marginal cost.
The supply curve is upward-sloping because
sellers can make more profit per unit if the market prices rise
A seller in a perfectly competitive market
sells the same product that other sellers sell.
If baseball bats and furniture are substitutes in production, then a rise in the price of baseball bats:
decreases the supply of furniture
If the government institute high taxes on the production of palm oil, the supply of palm oil
decreases.
The table shows the monthly individual supply schedules for four firms in the packed-meals market. What is the market supply at $5.75 per meal?
297,000 meals
If the supply of peanuts rises, then the price of peanuts
increases.
A fixed cost is one:
whose quantity cannot be changed in the short run.
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?
20 million gallons per week
(Table: Supply of Matcha Tea) Use Table: Supply of Matcha Tea. When the price of matcha tea is $0.75 per cup, the quantity of matcha tea supplied by Kelly will be _____ cups per day.
25
(Table: Supply of Matcha Tea) Use Table: Supply of Matcha Tea. If the price of matcha tea is $0.75 per cup, the total quantity of matcha tea supplied will be _____ cups per day.
50
What is quantity supplied?
It is the amount of an item that a seller is willing to sell at a particular price
A meat processing plant produces both steak and ground beef. What effect would rising market prices for steak have on the market for ground beef?
The supply of ground beef will decrease
Consider the supply curve for wool sweaters. An increase in the price of wool will:
decrease the supply of wool sweaters.
If a firm expects lower prices in the future
it will increase supply today.
If a seller expects prices to rise in the future
it will stock up today and sell the goods when the price rises.
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 ten.
If the price of quinoa rises, we generally expect the
quantity of quinoa supplied to rise
Which of the following lists only factors that would cause an increase in the supply of an item?
A decrease in input prices; a technological innovation; a fall in the price of a substitute-in-production.
(Figure: Market for Coffee) 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
German firms import machinery from the UK. What will happen to the supply of German goods manufactured using machinery from the UK, if the value of the euro falls against the British pound?
The supply curve will shift to the left
Anderson windows and doors imports wood from Canada. What would happen to the supply curve of Anderson if the value of the U.S. dollar rises against the Canadian dollar?
The supply curve will shift to the right
If expected future profits in an industry rise
supply will shift right.
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 number of sellers in the market; a rise in the price of a substitute-in-production.
(Figure: Market for New Housing in Dubai) Which graph shows the effect on the supply curve for new housing in Dubai, if economists predict a decrease in demand for new housing?
Graph B
(Figure: Market for Roses) Which graph shows what will happen to the supply of roses if the price of roses falls?
Graph B
(Figure: Change in Supply) There are four gas stations in your town. Which graph shows the effect on the local supply curve for gasoline if one of them shuts down?
Graph C
A beach resort in Bali builds 24 villas with private pools. They also establish two restaurants using state-of-the-art equipment (such as multipurpose ovens, freezers, and food processors). Meals are prepared using organic, locally sourced vegetables and meat. The hotel also uses water from the town supplier. Based on this scenario, what are the fixed costs for the beach resort?
The construction of the villas
As a part of a market research project, you survey six food trucks across the city to gather data on how many meals they would plan to sale at various prices. The data you collect is in the accompanying table. What is the change in the total supply of meals in your survey when the price falls from $7 per meal to $6 per meal?
The quantity supplied falls by 145.
When making a profit-maximizing "how much" decision, if the price of a good or activity is greater than the marginal cost of that good or activity, then the individual can be made better off by:
increasing the quantity as long as the price of one more unit exceeds the marginal cost.
(Figure: Graph) In the graph, a decrease in the price of the item will cause the movement from
point H to point G
(Figure: Graph) In the graph, a decrease in the price of the item will cause the movement from
point H to point G.
If the price of beef decreases, you can usually expect the:
quantity of beef supplied to decrease
Researchers have found a new strain of canola (a grain used to produce canola oil) that is resistant to pesticides and drought while yielding more canola oil. Holding all else constant, this research will:
shift the supply curve for canola oil rightward
Look at the chart which shows data for five different oatmeal cookie producers. Which sellers are NOT following the law of supply?
Ken and Ben
Which factor would cause a DECREASE in the supply of peanut butter?
a rise in the price of peanuts
An increase in the supply of coffee beans means:
a shift to the right of the entire supply curve for coffee beans.
(Figure: Graph) In the graph, the movement from point L to point K is caused by
an increase in the price of the item.
Exxon imports a significant amount of oil from Canada. What would happen to Exxon's supply curve if the value of the U.S. dollar falls against the Canadian dollar?
The supply curve will shift to the left
German firms import machinery from the UK. What will happen to the supply of German goods manufactured using machinery from the UK, if the value of the euro rises against the British pound?
The supply curve will shift to the right
What will the impact be on the supply of long-haul truck transportation services if diesel fuel becomes cheaper?
The supply of truck transportation services will increase
If Monica is building computers under conditions of diminishing marginal product, the marginal cost will:
be increasing
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 rises by 152,000.
As a part of a market research project, you survey six food trucks across the city to gather data on how many meals they would plan to sale at various prices. The data you collect is in the accompanying table. What is the change in the total supply of meals in your survey when the price increases from $8 per meal to $9 per meal?
The quantity supplied rises by 165.
