Whathappens when the price of a good with an elastic supply goes down?

producers will produce less & others will drop out of market

The law of demand states that

consumers will buy more when a price decreases

How does a firm set its totaloutput to maximize profit?

determine the largest gap between total revenue & total cost

Whatare diminishing marginal returns of labor?

additional workers increase output but at a decreasing rate

What is the law of supply?

the higher the price, the larger the quantity supplied

What does elasticity of demand measure?

how buyers will change their demand when prices riseor fall

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Supply and Demand

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Answers

1
a government payment that supports a business or market
tax
subsidy
regulation
excise tax
2
Whathappens when the price of a good with an elastic supply goes down?
existing producers will expand & new 1's will enter market
producers will produce less & others will drop out of market
existing firms will continue theirusual output but earn less
new firms will enter the market asolder ones drop out
3
cost that does not change,regardless of how much of a good is produced
total cost
variable cost
fixed cost
marginal cost
4
The law of demand states that
price will not influence demand
consumers will buy more when aprice increases
consumers will buy more when a price decreases
consumers will buy less when aprice decreases.
5
If the price of a good rises and income staysthe same, what is the effect on demand?
) demand stays the same
the prices of other goods drop
more goods are bought
) fewer goods are bought
6
whenthe government steps into a market to affect the price, quantity, or quality ofa good.
subsidy
excise tax
regulation
7
How does a firm set its totaloutput to maximize profit?
production at the point wheremarginal revenue is smallest
determine the largest gap between total revenue & total cost
set production so that totalrevenue plus costs is greatest
determine where marginal revenueand profit are the same
8
ameasure of the way quantity supplied reacts to a change in price.
elasticity of supply
law of demand
law of supply
elasticity of demand
9
Whateffect does the availability of substitute goods have on the elasticity ofdemand for a good
the availability of substitutesdoes not have an effect
demand is inelastic
demand is elastic
demand is unitary elastic
10
Whatare diminishing marginal returns of labor?
only a few workers have towait their turn to be productive
additional workers increase output but at a decreasing rate
additional workers will be moreproductive
some workers increase output butothers have opposite effect
11
the cost of producing one more unitof a good.
fixed cost
marginal cost
total cost
variable cost
12
What is the law of supply?
lower the price, the moremanufacturers will produce the good
the lower the price, the larger thequantity supplied
the higher the price, the smallerthe quantity supplied
the higher the price, the larger the quantity supplied
13
a chart that lists how much of agood all suppliers will offer at different prices.
demand curve
supply curve
market supply chart
market demand chart
14
are costs that rise or falldepending on how much is produced.
fixed costs
marginal cost
variable cost
total cost
15
a taxon the production or sale of a good.
excise tax
subsidy
regulation
16
equals fixed costs plus variablecosts
total cost
marginal cost
variable cost
fixed cost
17
Whichof the following does not cause a shift of an entire demand curve?
a change in consumer expectations
) a change in the size of thepopulation
a change in income
a change in price
18
Ceteris paribus means?
all things are different
the end is near
what will be will be
all things held constant
19
consumers reactto an increase in a good’s price by consuming less of that good & more ofothers
the substitution effect
the butterfly effect
the income effect
20
What does elasticity of demand measure?
time consumers needto change their demand for a good
how buyers will change their demand when prices riseor fall
a decrease in the quantity demanded
an increase in the quantityavailable
21
statesthat consumers buy more of a good when its price decreases and less when price increases
law of supply
law of demand
law of elasticity of demand
law of elasticity of supply
22
happens when aperson changes consumption of goods and services because of achange in income
income effect
substitution effect
butterfly effect

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