Class: ... The theory of production deals with the relationship between the factors of production ... a. subsidies are available to many e-commerce bu...
Ch.5 Test True/False Indicate whether the statement is true or false. ____
1. If producers expect lower prices in the future, they may withhold some of the supply.
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2. When more suppliers enter the market, the market supply will typically decline.
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3. The number of items sold multiplied by the average price of each item yields the total revenue of a business.
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4. The Law of Supply states that suppliers will normally offer less for sale at higher prices and more for sale at lower prices.
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5. An increase in the cost of inputs can cause the supply curve to shift to the left.
Multiple Choice Identify the choice that best completes the statement or answers the question. ____
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6. All of the following can change the market supply curve EXCEPT a. the cost of labor. b. the expectation that prices are about to increase. c. a change in the demand for the product. d. the numbers of sellers offering the product. 7. The supply of a product normally decreases if a. the cost of inputs goes down. c. the price of the product increases. b. more producers enter the market. d. taxes on the product increase. 8. When employees are getting in each other's way, the firm is operating a. in Stage I of production. c. in Stage III of production. b. in Stage II of production. d. as much as it possibly can. 9. Total cost is the sum of the a. fixed costs and overhead. c. fixed and variable costs. b. all variable costs. d. fixed and marginal costs. 10. The level of profit-maximizing output is reached when marginal cost is a. double marginal revenue. c. less than marginal revenue. b. one-half of marginal revenue. d. equal to marginal revenue. 11. When producers offer fewer products for sale at each and every price, a. the supply curve has shifted to the right. b. the supply curve has shifted to the left. c. the price per unit decreases. d. they expect subsidies. 12. The theory of production deals with the relationship between the factors of production and a. the cost of raw materials. c. fixed costs. b. the cost of marginal returns. d. the output of goods and services. 13. Rent payments and property taxes would be counted as a. total cost. c. fixed costs. b. variable costs. d. marginal costs.
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Name: ________________________
ID: A
____ 14. Many businesses are engaging in e-commerce because a. subsidies are available to many e-commerce businesses. b. fixed costs are minimal. c. operating costs never increase. d. variable costs can be almost eliminated. ____ 15. Profits will be maximized when marginal revenue a. is double marginal cost. c. is one-half marginal cost. b. equals marginal cost. d. exceeds marginal cost. ____ 16. Supply Schedule for CDs Quantity supplied (in millions) 100 300 500 700 900 1,100
Price per CD $10 $12 $14 $16 $18 $20
a. b.
If you were to graph this supply schedule, the supply curve would be horizontal. c. slope upward from left to right. be vertical. d. slope downward from left to right.
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Name: ________________________
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ID: A
According to this supply curve, if the price of movie videos decreases from $18 to $16, the quantity supplied will a. rise from 800 to 1000. c. rise from 600 to 800. b. fall from 1000 to 800. d. fall from 800 to 600.
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Which of the following choices could cause the movement shown in the graph? technology improves production c. the number of firms increases inputs become cheaper d. taxes increase
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Name: ________________________
ID: A
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a. b. c. d.
Which of the following choices could cause the movement shown in this graph? inputs become more expensive the number of firms decreases technology improves production taxes increase
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Name: ________________________
ID: A
Matching Match each statement with the correct item below. a. situation in which suppliers offer different amounts of products for sale at all possible prices b. principle that states that in the short run, output will change if only one input is varied c. total output produced by a firm d. principle that suppliers will normally offer more for sale at high prices and less at lower prices e. extra cost incurred when a business produces one additional unit of a product f. graph that shows the quantities of a product offered at various prices by all firms that offer the product g. period of production that is too short for any adjustments in production except changes in labor h. sum of the fixed and variable costs i. measure of the way in which quantity supplied responds to changes in price j. total fixed cost ____ ____ ____ ____ ____ ____
20. 21. 22. 23. 24. 25.
Law of Supply overhead Law of Variable Proportions total cost supply elasticity marginal cost
