Based on these graphs, which of the following BEST describes equilibrium? The point

at which quantity demanded & supplied both equal 200

At what point should the owners of a failing factory shut it down?

when revenue per hour is lower than operating cost per hour

In determining the optimal level of output, a firm should aim for the

point of maximum profitability for the company.

The scrubbers that the government requires to clean power-plant emissions is likely to

decrease supply by increasing cost of production.

Which of the following typically happens as prices for a good or service rises?

More suppliers enter the market.

Why is a free market economy more efficient than a centrally planned economy?

It relies on prices to allocate resources.

Which factor would shift the supply curve for ethanol in the United States to the right?

Trade agreement opening U.S. markets to imported ethanol

A wildfire put a major lumber producer out of business. One consequence of this is graphed as

a supply curve that has shifted to the left

It is a bad move for a company to produce more of a good or service if

marginal cost exceeds marginal revenue.

How would a new government subsidy for rice farmers affect the market for rice? It would ...

increase the supply by decreasing farmers' production costs

A new film company's decision to locate its operations in Los Angeles is most similar to...

A firm locating close to the inputs of its product

What does it mean to say that supply is unitary elastic?

The percentage change in price and in supply are the same.

Which of the following government actions would increase the supply of cars in the U.S. ?

The removal of car mileage regulations

Which of the following is generally true after a shift in supply or demand?

Equilibrium is gradually restored.

What does a firm's supply schedule show?

How price changes affect supply for a market

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Practice for Topic 3 Supply

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Quiz 3.4-3.9

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Questions 20

Answers

1
Which of the following would be an example of a fixed cost on a farm?
Charge for fertilizer for the growing season
Fuel to operate machinery
The mortgage on the property
Costs of seed
2
The law of supply declares which of the following?
Supply falls as price falls.
Supply increases as price falls.
Supply falls as prices increase.
Supply stays the same no matter how prices change.
3
If minimum wage goes up, as a worker, you would be
both a and c
unhappy because now input costs are higher so less profit
happy because you make more
sad because now there are fewer minimum wage jobs for you
4
Based on these graphs, which of the following BEST describes equilibrium? The point
at which the price equals $3.00
at which the quantity supplied equals the price
at which the quantity supplied equals 200 or more
at which quantity demanded & supplied both equal 200
5
At what point should the owners of a failing factory shut it down?
when profit per hour is lower than operating cost per hour
when revenue per hour and marginal cost per hour are equal
when fixed cost & marginal cost per hour are equal
when revenue per hour is lower than operating cost per hour
6
In determining the optimal level of output, a firm should aim for the
output level where marginal returns are still increasing.
point where decreasing returns on labor become negative
output level where fixed costs exceed variable costs.
point of maximum profitability for the company.
7
The scrubbers that the government requires to clean power-plant emissions is likely to
decrease supply by increasing transportation cost.
decrease supply by increasing cost of production.
increase supply by increasing efficiency
increase supply by increasing subsidy costs
8
Which of the following typically happens as prices for a good or service rises?
Consumers seek more of the good or service to consume.
Demand becomes increasingly elastic.
Suppliers leave the market.
More suppliers enter the market.
9
Why is a free market economy more efficient than a centrally planned economy?
It keeps prices from going up and down as demand changes.
It allows experts to determine what goods to produce.
It relies on prices to allocate resources.
It prevents consumers from engaging in barter.
10
What is your Profit if your Revenue = $275, Fixed Costs = $40 & Variable Costs = $125?
$440
None of these
$110
$150
11
Which factor would shift the supply curve for ethanol in the United States to the right?
Removal of subsidies from the govt to U.S. ethanol producers
Excise tax placed by government on ethanol use
Trade agreement opening U.S. markets to imported ethanol
American ban on ethanol from all producers
12
Per the graph, after adding the 8th worker, what will company's owner MOST LIKELY do?
order more beans for making beanbags
hire more workers
order more cloth for making beanbags
reduce the workforce
13
A wildfire put a major lumber producer out of business. One consequence of this is graphed as
a demand curve that has shifted to the right
a supply curve that has shifted to the right
a demand curve that has shifted to the left
a supply curve that has shifted to the left
14
It is a bad move for a company to produce more of a good or service if
marginal cost exceeds marginal revenue.
fixed costs exceed marginal revenue.
variable costs exceed fixed costs.
demand exceeds supply.
15
How would a new government subsidy for rice farmers affect the market for rice? It would ...
increase the supply by increasing the demand for rice
decrease the supply by increasing farmers' production costs.
decrease supply by encouraging farmers to grow another grain
increase the supply by decreasing farmers' production costs
16
A new film company's decision to locate its operations in Los Angeles is most similar to...
A firm trying to remove a sudden spike in input costs
A firm locating close to the inputs of its product
A firm trying to escape government regulation
A firm locating close to its consumers
17
What does it mean to say that supply is unitary elastic?
Supply is very sensitive to changes in price.
A change in supply is observed only if price increases.
Supply does not change with changes in price.
The percentage change in price and in supply are the same.
18
Which of the following government actions would increase the supply of cars in the U.S. ?
The establishment of an excise tax on cars
An end to subsidies to automakers
The establishment of quotas on imported cars
The removal of car mileage regulations
19
Which of the following is generally true after a shift in supply or demand?
Equilibrium price moves down the demand curve.
Supply rises along with demand.
Equilibrium is gradually restored.
Demand falls as prices rise.
20
What does a firm's supply schedule show?
The impact of the substitute effect
How price changes affect supply for a market
Elasticity of demand
How price changes affect demand for a particular consumer

Practice for Topic 3 Supply Flashcards | StudBud