Microeconomics - Supply

Consider the words "supply" and "production." Which of the following statements is true?

"Supply" refers to what is provided to the market, while "production" refers to the quantity produced.

Taxes and subsidies matter because they:

-Stimulate production or collect revenue. -Have unanticipated effects on other markets.

When a nonprice determinant of supply changes what will be the effect on the market?

A shift in the supply curve at all possible prices

A new technology increases the production of widgets by 25% at all possible prices. Which of the following statements offers the best description of the location of the new supply curve, relative to the original curve?

A shift to the right with a greater increase occurring at higher price levels.

Which of the following would shift the supply curve for guitars?

A tax is implemented on guitars

Which of the following events will increase supply?

A technological improvement that reduces the cost of production

Consumer expectations influence the (blank) curve, and producer expectations influence the (blank) curve.

Demand Supply

A tax on producers:

Increases the cost of producing.

Why is the supply curve upward-sloping?

Producing significantly more of a product involves increased costs so the price of the good must rise for sellers to be willing and able to increase the quantity of the good they supply to the market.

The size of the supply shift is determined by the:

Size of the producer tax.

How is the market supply of a good or service calculated?

Summing the quantity produced by all sellers at every price within the market.

Producers expect the price of lumber to increase next month. How will producers respond today?

Supply of lumber will decrease at every price.

Firms expecting a cold winter will anticipate an increased demand for scarves resulting in an increased future price. How will the market adjust today?

Supply will decrease at every possible price.

Which of the following likely affects the demand curve?

Taxes and subsides placed on consumers.

Which of the following likely affects the supply curve?

Taxes and subsidies placed on producers.

A small nation produces coffee and chickens. What is one possible reason the opportunity cost of producing chickens will increase relative to coffee?

The cost of producing coffee has decreased.

Which of the following are examples of resources?

Workers hired to pick grapes at a vineyard. An oven used to bake bread at a bakery.

The supply curve will shift to the right or left when:

a non-price determinant of supply changes.

An increase in the quantity of a good - service - or resource supplied at every price is:

an increase in supply.

The taxes and subsidies that are under consideration in analyzing supply apply to (businesses/consumers).

businesses

Shifts in supply:

can be parallel. occur when there is a change in the nonprice determinants of supply.

If both consumers and producers have a change in expectations about future prices,:

demand and supply will shift.

According to a popular statement in economics, "if not for (blank) we should be able to grow the world's food supply in a flower pot".

diminishing marginal productivity

If a fitness center owner decides to hire additional employees but does not change the size of the fitness center or the amount of capital available to its employees to perform their tasks, the fitness center will likely experience:

diminishing marginal productivity.

The price of a good and the quantity supplied are:

directly related

A change in supply:

does not have to be a parallel shift.

A change in supply:

has the effect of shifting the entire supply curve to the right or left. occurs when a nonprice determinant of supply changes.

A tax on producers (increases/decreases) the cost of producing.

increases

On the supply side of the market, when the price of a good increases, the quantity supplied of the good:

increases

According to the law of _____ , producing significantly more of a product than current levels will come at a higher cost, so the price of the good must rise for sellers to be willing and able to increase the quantity of the good they supply to the market.

increasing opportunity costs

When producers expect higher future prices, current supply shifts to the

left

Taxes charged on and subsidies provided to consumers are:

likely to shift the demand curve.

A subsidy to producers:

lowers the cost of producing.

When we say in economics that there is an increase in supply, we mean that:

more output is being supplied at every price, all else held constant.

Firms will be willing and able to produce more output only when prices rise, because the (blank) cost of production is rising.

opportunity

Firms will be willing and able to produce more output only when prices rise because the:

opportunity cost of production is increasing.

All else equal, a change in the (blank) of a good, service, or resource changes the quantity supplied of the good, service, or resource.

price

The supply curve focuses entirely on the changes in the (blank) of the product and holds everything else constant.

price

When we consider the effects of taxes and subsidies on the market for goods, services, and resources, we evaluate how taxes and subsidies affect:

producers

At a firm's level, higher expected prices can increase the current (blank) while decreasing the current (blank) to the market.

production supply

Any change in technology and the availability and the quality of resources are likely to affect the (blank) that producers are willing and able to supply to the market at every price.

quantity

Any change in the availability and quality of resources and technology will likely affect the:

quantity producers are willing and able to supply to the market at every price.

When producers expect lower future prices, current supply shifts to the

right

The anticipated future outcomes, including prices, that sellers associate with the production of a good, service, or resource are expectations of the

seller

An increase in tax rates on consumers is likely to:

shift the demand curve.

The size of the supply shift is determined by the:

size of the producer subsidy.

All else equal, a change in the price of a good, service, or resource changes the quantity (blank) of the good, service, or resource.

supplied

The size of the producer tax will influence the size of the shift in (blank)

supply

The supply curve displays the:

supply of the good in a graph showing the different prices and their corresponding quantity supplied.

The supply schedule displays the:

supply of the good in a table showing the different prices and their corresponding quantities supplied.

Suppose that tomato producers expect prices to fall in the future. This will likely cause current:

supply to increase.

If the production of a good incurs at a lower cost,:

the opportunity cost (in terms of other goods that could have been produced) has decreased. the opportunity cost of producing other goods (in terms of the amount of this good that could have been produced) has increased.

If the production of a good involves a lower cost,:

the opportunity cost of producing other goods has increased.

When the price of smart phones increases:

the quantity of smart phones supplied will increase

The price of sugar increases. The law of supply states:

the quantity of sugar supplied will increase.

In September, heating-oil producers anticipate a brutally cold winter and higher prices of heating oil by the end of November. We can expect that:

the supply of heating oil will fall now.

Suppose that days of rain increase water levels in a river and wash away the docks, canoes, and kayaks of the riverside rental businesses. We can conclude that:

the supply of recreational river sports will fall.

A decrease in the supply of cellphones implies:

there is a decrease in the quantity of cellphones supplied at each price.