Pre-Chapter Questions 7 (Ch.6)

Supply will increase as the number of _______.

Sellers in the market increases

If input prices decrease, supply will shift ________. a. rightward b. leftward

a. rightward

Suppose Vera makes hand-knit scarves and sweaters that she sells on Etsy.com. If the price at which Vera can sell her scarves falls, what is likely to happen to Vera's supply of sweaters? a. it will increase b. it will remain unchanged c. it will decrease

a. it will increase Vera will shift her resources away from producing scarves and towards producing sweaters, so her supply of sweaters will increase.

Technological innovations that decrease a firm's marginal cost lead to a. no change in supply b. an increase in supply c. a decrease in supply

b. an increase in supply

Suppose a recent announcement by the United States Department of Agriculture leads Mr. Zuckerman, who grows sugar cane, to believe that the price of sugar cane will increase sharply next year. This should lead Mr. Zuckerman's current supply of sugar cane to ______. a. increase b. remain unchanged c. decrease

c. decrease Expectations for future price increases lead current supply to decrease because suppliers prefer to sell their product when prices are high.

The amount by which price exceeds seller's reservation price is _____. a. marginal cost b. excess supply c. producer surplus d. total surplus

c. producer surplus

Suppose Elsa owns an ice cream shop. If she expects the price of ice cream to fall next month, then this should ________. a. lead her future supply of ice cream to increase b. lead her current supply of ice cream to decrease c. have no effect on her current supply of ice cream d. lead her current supply of ice cream to increase

d. lead her current supply of ice cream to increase