Chapter 4 + 5

The level of profit-maximizing output is reached when marginal cost is

equal to marginal revenue.

If a modest price increase has little or no effect, the demand for the product is

inelastic.

When producers offer fewer products for sale at each and every price,

the supply curve has shifted to the left.

Based on the table, what is the variable cost of the third worker?

$90

According to the demand curves, at a price of $20, how many more mystery novels would Kara demand than would Damien?

1 more

Assume that Damien and Kara are the only two people in the market for mystery novels. Based on the graphs, what would be the market quantity demanded for mystery novels at a price of $5?

15

According to the table, the company must hire at least how many workers to earn a profit?

2

Which of the following will cause the market supply curve to shift?

a change in the numbers of sellers offering the product.

The movement in the graph shows that the quantity demanded of butter decreased because the

price of margarine decreased.

The change from the old demand curve to the new demand curve shown in the table represents a

shift of the demand curve to the right.

If you were to graph this demand schedule, the demand curve would

slope downward from left to right.

Which of the following choices could cause the movement shown in the graph?

taxes increase.

Consumers' willingness to buy more of an item when its prices goes down is partially due to

the income effect.

What does the movement shown on this graph represent?

the inverse relationship between price and quantity demanded.

According to the supply curves, at a price of $25, how many more soccer balls would ABC Corp. supply than would XYZ Corp.?

3 more.

An increase in the price of milk causes a decrease in the demand for cereal. The two products are

complements.

Advertising, fashion trends, and new product introductions serve to

create consumer demand.

According to this supply curve, if the price of t-shirts decreases from $18 to $16, the quantity supplied will

fall from 1000 to 800.

Based on the passage and what you know about demand, why are sales of baseball cards dropping?

Consumer tastes have changed to favor Game Boys and MP3s.

Which products shown in the table are likely to have elastic demand?

fresh tomatoes, gasoline from a particular station, butter

Which products shown in the table are likely to have inelastic demand?

gasoline in general, services of medical doctors.

Based on the graph, how does the market supply of baseball gloves change if the price increases from $25 to $35?

quantity supplied increases by 3,000

The theory of production deals with the relationship between the factors of production and

the output of goods and services.

When a manufacturer of pain medication reduced the price of the medication by 30%, the quantity demanded increased by almost exactly 30%. Demand for the product is

unit elastic.