Econ Module 3 study

The price of a dozen eggs rises from $3 to $4.70. In response to this price change, quantity supplied increases from 100,000 dozen eggs to 127,000 dozen eggs. What is the approximate price elasticity of supply for eggs? 3.52 1.86 2.5 0.48

0.48

The price of cakes rises by 15%. In response, the quantity supplied of cakes rises by 30%. The price elasticity of supply for cakes is: 2. -0.5. 0.33. 0.5.

2

The price elasticity of supply for a good is 2 if a _____ in price leads to a 4% decrease in the quantity supplied. 2% increase 2% decrease 4% decrease 4% increase

2% decrease

Which of the following lists only factors that would cause an increase in the supply of an item? A rise in the price of a substitute-in-production; an increase in the price of a complement-in-production; an expectation that the price of the item will increase in the future. A decrease in the number of sellers in the market; a fall in the price of a complement-in-production; a technological setback. A decrease in input prices; a technological innovation; a fall in the price of a substitute-in-production. An increase in input prices; a decrease in the number of sellers in the market; an increase in the price of a substitute-in-production.

A decrease in input prices; a technological innovation; a fall in the price of a substitute-in-production.

Which of the following scenarios describes a business that is NOT following the law of supply? When the price of car detailing rises, Ermo's Auto Garage hires more workers to do car detailing. Automobiles fall in price, and Maria's Autorama Ltd. is now willing to sell more vehicles. The higher the price of custom-made cakes in the market, the more Manfred is willing to bake and sell cakes. Delilah is less willing to chauffeur people to the airport when the price of airport rides falls.

Automobiles fall in price, and Maria's Autorama Ltd. is now willing to sell more vehicles.

How will the supply of clothing change if the forecast is that clothing prices will rise in the next few months? The supply of clothing will remain unchanged today. Suppliers will stop producing clothing and switch to an alternate item. The supply of clothing will decrease in the market today. The supply of clothing will increase in the market today.

The supply of clothing will decrease in the market today.

Which factor would cause an INCREASE in the supply of light bulbs? an increase in the price of light bulbs a decrease in the number of firms manufacturing light bulbs expectations that the price of light bulbs will rise an advance in the technology of producing 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 income, if ice cream is a normal good a decrease in the price of strawberry ice cream, a substitute for mint chocolate chip ice cream a decrease in the price of ice cream an increase in the price of cream, an ingredient in ice cream

an increase in the price of cream, an ingredient in ice cream

Which factor would result in a decrease in the supply of linen shirts? a decrease in the price of linen fabric a beneficial technological change an increase in the number of suppliers of linen an increase in the price of linen fabric

an increase in the price of linen fabric

what is the difference between a change in quantity supplied and a change in supply?

change in quantity supplied is moving along the supply line and based on a change in price. Change in supply is the shift of the curve and means that something besides price has moved.

Price takers produce only agricultural items in the market. set their market prices. charge the prevailing prices and do not have any effect on the market price. can control the market prices of the products they sell.

charge the prevailing prices and do not have any effect on the market price.

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. substitutes in production. unrelated goods. inferior goods.

complements in production

If baseball bats and furniture are substitutes in production, then a rise in the price of baseball bats: increases the demand for furniture. decreases the demand for furniture. increases the supply of furniture. decreases the supply of furniture.

decreases the supply of furniture

It is very easy for Evelyn to find inexpensive inputs for her business. Evelyn's supply is therefore likely to be: elastic. inelastic. unit-elastic. perfectly elastic.

elastic

Supply curves tend to be _____ the more time producers have to adjust to price changes. steeper flatter uneven inflexible

flatter

A supply curve (i) plots the quantities a seller is willing to sell at different prices. (ii) shows the total cost to the seller. (iii) shows rising marginal costs. (iv) shows rising fixed costs. (i), (ii), and (iii) only (i) (i) and (iii) (i), (ii), (iii), and (iv)

i and iii

If quantity supplied does not respond substantially to a relatively large change in price, supply is: elastic. inelastic. negatively sloped. insensitive to changes in price.

inelastic

what shifts the supply curve?

input prices, technology, expectations, number of sellers

If a seller expects prices to rise in the future the quantity supplied will increase today. there will no change in the seller's actions today. the supply will increase today. it will stock up today and sell the goods when the price rises.

it will stock up today and sell the goods when the price rises.

Holding everything else constant, producers are willing to offer more units for sale when the price at which they can sell their product increases. This concept is known as the

law of supply

Rising input costs lead to decreased profitability for a seller. rising marginal costs for a seller. increased supply of the item in the market. lower opportunity costs of producing the item.

rising marginal costs for a seller.

Price elasticity of supply measures how responsive: sellers are to changes in cost of production. sellers are to changes in the prices of competing goods. sellers are to price changes. buyers are to price changes.

sellers are to price changes.

An individual supply curve is the same as the total market supply curve. the marginal cost curve. lower than the marginal cost of producing an item. positively sloped because of technological advancement.

the marginal cost curve

what impacts the price elasticity of the supply curve?

the number of producers, spare capacity, ease of switching, ease of storage, length of production period, time period of training, factor mobility, and how costs react.

what does the supply curve really mean? What condition has to be true for that definition to hold?

the supply curve is the relationship between product price and quantity of product that a seller is willing and able to supply. holding all else equal