Unit Five Econ Test

What happens in the case of a product that has elastic supply when the price decreases?

A. existing producers expand production

B. existing producers produce less

C. some producers drop out of the market

D. both A and C

E. both B and C

For which of the following products or services is supply likely to be inelastic in the short term whether prices rise or fall?

A. cargo ships

B. haircuts

C. newspapers

D. staples

When a price increases and producers increase the production of goods, this is an example of?

A. negative externality

C. negative incentive

B. positive externality

D. positive incentive

This develops from the choices of both current and new producers of a good, and is the tendency of suppliers to offer more of a good at a higher price?

A. law of demand

B. supply curve

C. supply schedule

D. law of supply

This displays the relationship between prices and the total quantity supplied by all firms in

the market?

A. law of demand

B. supply curve

C. supply schedule

D. law of supply

E. both B and C

The key factor in determining the elasticity of supply is?

A. price

B. goods

C. demand

D. time

What is the term for supply of a product that cannot easily or quickly expand or reduce its production in response to price?

A. profit

B. elastic

C. inelastic

D. time

The amount a supplier is willing and able to supply at a certain price is the?

A. quantity supplied

B. elastic supply

C. supply schedule

D. quantity demand

What happens in the case of a product that has elastic supply when the price increases?

A. existing producers expand production

B. existing producers produce less

C. new producers enter the market

D. both A and C

E. both B and C

A graph of the data points in the supply schedule creates which of the following?

A. demand curve

B. a supply curve

C. quantity of goods demanded

D. supply of goods available

When do diminishing marginal returns occur?

A. when workers increase output but others decrease it

B. when additional workers increase output at a decreasing rate

C. when extra workers will have to wait their turn to be productive

D. when additional workers will get in each other's way

How is the total cost of a factory or other production site determined?

A. marginal cost plus fixed cost

B. fixed cost plus variable cost

C. fixed cost minus marginal cost

D. marginal cost plus variable cost

A cost that rises or falls depending on the quantity produced is called a (n)?

A. total cost

B. marginal cost

C. fixed cost

D. variable cost

A manufacturer sets their total output to maximize profit by setting production so?

A. that total revenue plus costs is greatest

B. marginal revenue is smallest

C. largest gap between total cost and total revenue

D. marginal cost is higher than profit

The change in output that results having one more worker is called the?

A. marginal revenue

C. marginal cost

B. marginal product of labor

D. marginal labor

A cost that does not change depending quantity produced is called a(n)?

A. total cost

B. marginal cost

C. fixed cost

D. variable cost

The additional cost of producing one more unit is called a(n)?

A total cost

B. marginal cost

C. fixed cost

D. variable cost

When would it make sense for a factory that is losing money to remain in operation if?

A. marginal revenue is equal to marginal cost

B. total cost of the goods exceeds operating cost

C. marginal product of labor becomes negative

D. revenue from the goods being manufactured exceeds the operating cost

When the addition of another worker causes production to decrease is called?

A. marginal cost

B. diminishing marginal returns

C. negative marginal returns

D. increasing marginal return

The additional income from selling one more unit of a good is called?

A. marginal revenue

B. marginal product of labor

C. marginal cost

D. operating cost

The cost of operating a facility is called?

A. marginal revenue

C. marginal cost

B. marginal product of labor

D. operating cost

When the addition of another worker causes production to decrease in production below the addition of previous worker?

A. marginal cost

B. diminishing marginal returns

C. negative marginal returns

D. increasing marginal returns

The graph displays a(n)?

A. increase in demand

B. an increase in supply

C. a decrease in supply

D. a rise in price

One method used by governments to affect supply is to give payments that support businesses or the market these payments are called?

A. subsidies

B. welfare

C. taxes

D. regulations

If more suppliers enter into a market, the supply of a good (car stereos) will increase and the supply curve will?

A. stay the same

B. shift to the left

C. shift up

D. Shift to the right

If a seller expects that the price o/ a hood (corn) will rise in the future (winter), they may?

A. sell the goods now

B. store the goods until a later time

C. dump the goods

D. keep the goods forever

The graph displays?

A. increase in demand

B. an increase in supply

C. a decrease in supply

D. a rise in price

An indirect means that governments use to influence the supply of goods in the market through laws this is called?

A. subsidies

B. welfare

C. taxes

D. regulations

During times of inflation (the value of money declines causing prices to increase), suppliers will?

A. sell goods

B. store goods to sell later

C. destroy stored goods

D. demand a bailout from the government

Since suppliers set output at the most profitable level (price is equal to marginal cost), if the cost of inputs rises, the supply curve will shift?

A. down

B. up

C. to the right

D. to the left

New technologies will cause?

A. decline in the cost of inputs

B. the supply curve to shift to the left

C. the supply curve to shift to the right

D. both A and B

E. both A and C

One reason government subsidize manufacturers is to?

A. promote free trade

B. protect companies from foreign competition

C. to raise taxes

D. to outsource jobs to overseas firms

The government can reduce the supply of some goods, such as cigarettes, by placing this type of tax on these goods?

A. excise tax

B. sin tax

C. death tax

D. tariff

Regulations cause supply curves to the shift to the left because of which of the following reasons?

A. increased cost of manufacturing

B. increased cost of in inputs

C. decrease in price of goods

D. both A and B

E. both B and C

If a soybean farmer know that by Summer, the price per bushel will drop by $2.00, they will?

A. sell the goods now

C. dump the goods

B. store the goods until a later time

D. keep the goods forever

The US imports oil from Venezuela, the discovery of new oil fields will cause the supply curve to?

A. down shift

B. shift up

C. shift to the right

D. shift to the left

Which of the following would cause the supply curve to shift to the left?

A. number of suppliers declines

B. the number of suppliers increase

C. cost of inputs decreases

D. government deregulates the market