MICRO ECON Exam 1

The building contractor Wise Construction is initially at point E in the multi-family apartment building market. When prices of a single-family homes rise, Wise Choice starts to build more single-family homes and fewer multi-family apartment buildings. Which point represents a plausible supply choice for the company in the multi-family apartment building market?

Point C

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

Three gas stations make up the market for gasoline in your town. The number of gallons of gasoline that each gas station is willing to supply per week at various prices is indicated in the accompanying table. Which curve in the following diagram represents the market supply curve?

C

If companies frequently start using drones to deliver products, which graph shows the effect this will have on the market for drones.

Graph A

Which of these graphs shows what will happen in the market for bread if the price of organic wheat used in bread production rises?

Graph C

You run an electronics store that sells, among other items, big screen televisions. As the market price of big screen televisions decreases, the: supply of big screen televisions increases. quantity of big screen televisions supplied decreases. quantity of big screen televisions supplied increases. supply of big screen televisions decreases.

quantity of big screen televisions supplied decreases

If the price of jet fuel rises, the

quantity of jet fuel supplied will increase

When plotting a supply curve, you measure

quantity supplied on the horizontal axis.

Diminishing marginal product leads to

rising marginal costs for a seller.

Henderson Lumber is a mill that produces both boards used in construction and sawdust, a byproduct of the board production used in agriculture. When the housing market collapses, causing house prices along with the prices of boards used to build houses to fall, Henderson Lumber's ___ will likely ___?

supply of sawdust; decrease

Paper produces can manufacture both printing paper and drawing paper. What effect would rising prices for printing paper have on the supply of drawing paper?

The supply of drawing paper will decrease

A farmer finds that when he produces more pumpkins, he also has more pumpkins he can sell as decorations. To the farmer, pumpkins and decorative pumpkins are

complements in production

In employing the marginal principle, a seller may:

decide whether to supply one more unit of a good or service.

As an equity analyst with an investment management company, you monitor market conditions in the dairy sector. Which of these would shift the market supply curve you've modeled for milk?

expectations of future decline in the price of milk

The Rational Rule for Sellers says that a seller should sell one more unit oof an item if the price is

greater than or equal to the marginal cost

In the graph, the movement from point L to point K is caused by a(n):

increase in the price of an item

The ___ is the increase in output that id produced when a business hires an additional worker

marginal product

The law of supply refers to the

positive relationship between price and quantity supplied