Econ ch.5

QUESTION: According to the law of supply, when prices increases,

ANSWER: quantity supplied increases

QUESTION: Which of the following is a variable cost?

ANSWER: raw materials to make product

QUESTION: FROM THE HAMBURGER SUPPLY CURVE GRAPH, On curve S1, when the price is $2.50, what is the quantity supplied?

ANSWER: 300

QUESTION: A small grocery store makes several technological changes. Which one will improve labor productivity?

ANSWER: Replace old cash registers with UPC scanners.

QUESTION: The additional expense of producing one more unit of a product is called

ANSWER: marginal cost

QUESTION: What motivates producers to increase supply?

ANSWER: profit

QUESTION: Which of the following is most likely to improve labor productivity?

ANSWER: providing training for workers

QUESTION: How does a business calculate total profit?

ANSWER: total revenue minus total cost

QUESTION: Which of the following examples demonstrates elastic supply?

ANSWER: A CD fails to be a hit, stores discount it by 30 percent, and the recording company lowers production by 50 percent.

QUESTION: Which of the following is an example of input costs affecting supply?

ANSWER: A toy maker reduces production because the price of lead-free paints rises.

QUESTION: FROM THE HAMBURGER SUPPLY CURVE GRAPH, What conclusion can you draw from this supply curve?

ANSWER: An increase in the number of producers increased supply.

QUESTION: Which of the following is an example of supply?

ANSWER: Ann has a commercial oven and bakes wedding cakes for friends.

QUESTION: Which of the following is an example of producer expectation affecting supply?

ANSWER: As oil prices rise, a bicycle factory increases production levels.

QUESTION: What happens when businesses hire too many workers?

ANSWER: Employees get in each other's way, causing disorganization and inefficiency. Abdi says too many cooks in the kitchen.

QUESTION: FROM THE HAMBURGER SUPPLY CURVE GRAPH, On curve S2. when price changes from $4.00 to $1.50, how does quantity supplied change?

ANSWER: It decreases by 500.

QUESTION: Why do businesses want to know what their profit-maximizing output is?

ANSWER: It is the point at which each unit produced is earning the highest possible profit.

QUESTION: Which of the following is a fixed cost for a steel mill?

ANSWER: The chief financial officer is paid a sal

QUESTION: Manju opens the first Indian restaurant in her city, and it is a success. How will her success most likely affect the number of producers?

ANSWER: Two more Indian restaurants will open, but because of the limited number of customers, one will eventually fail.

QUESTION: Why do small businesses often become more efficient when they add workers?

ANSWER: Workers specialize and divide tasks.

QUESTION: Which of the following businesses is most likely to have an inelastic supply?

ANSWER: a contractor that builds highways

QUESTION: Which of the following producers is most likely to have an elastic supply for its product?

ANSWER: a hot dog stand

QUESTION: Who is a producer?

ANSWER: a provider of goods or services

QUESTION: What is the most likely outcome when the number of producers of a particular product rises?

ANSWER: an increase in supply

QUESTION: The appearance of a supply curve is

ANSWER: an upward slope, bottom left to top right

QUESTION: Car manufacturers who use robots to do certain jobs on the assembly line are trying to increase supply by

ANSWER: applying new technology

QUESTION: Which item shows all fixed costs?

ANSWER: business licences, insurance, mortgage

QUESTION: You own a small bakery that supplies cheesecakes to local restaurants. Which of the following actions is most likely to help you increase supply quickly?

ANSWER: buy a new oven that bakes more cheesecakes simultaneously

QUESTION: How is marginal cost calculated?

ANSWER: change in total cost divided by change in total product

QUESTION: A business that discovers a decline in profit can best solve the problem by

ANSWER: creating a production costs and revenues schedule to find the profit-maximizing output

QUESTION: The government uses excise taxes to

ANSWER: decrease the supply of products it doesn't want people to use

QUESTION: Which of the following lists contain only variable costs for an automobile factory?

ANSWER: electricity to run drills, wages, windshields

QUESTION: Which of the following are examples of government actions?

ANSWER: excise tax, regulation, subsidy

QUESTION: Total cost is the sum of

ANSWER: fixed costs and variable costs

QUESTION: The difference between fixed costs and variable costs is that

ANSWER: fixed costs remain the same; variable costs depend on how much is produced

QUESTION: The ease of changing production to respond to price change determines

ANSWER: how elastic a supply is

QUESTION: The amount of goods and services that a person can produce in a given time is called

ANSWER: labor productivity

QUESTION: The change in total output that results from hiring one additional worker is called

ANSWER: marginal product

QUESTION: FROM THE HAMBURGER SUPPLY CURVE GRAPH, What factor that affects supply does this graph illustrate?

ANSWER: number of producers

QUESTION: Supply curves are created using the assumption that all economic factors remain constant except a. demand

ANSWER: price

QUESTION: Business owners decide on the right number of workers by analyzing data to learn when

ANSWER: profit-maximizing output is reached

QUESTION: What is the most common reason for supply to be inelastic?

ANSWER: the difficulty of changing the amount produced

QUESTION: What does a marginal product schedule show?

ANSWER: the relationship between labor and marginal product

QUESTION: A supply schedule is related to a supply curve because

ANSWER: the supply curve shows the data from the supply schedule in graphic form

QUESTION: Supply is defined as

ANSWER: the willingness and ability of producers to offer goods and services for sale

QUESTION: Which of the following is most likely to have elasticity of supply for their product?

ANSWER: wedding-cake baker