Economics Chapter 3 Part 2 Supply Review

__________ is a measure of the way suppliers respond to a change in price.

• The marginal product of labor
• Ceteris paribus
• Elasticity of supply
• The market supply curve

The law of supply describes the relationship between

• price and demand.
• demand and supply schedule.
• price and quantity supplied.
• market supply schedule and demand.

Which of the following businesses has elastic supply?

• newspaper publishing
• apple farming
• hair cutting
• electricity production

If sellers expect the price of a good to rise in the future, they are likely to

• put more goods on the market immediately.
• raise their prices now.
• store goods now and sell more in the future.
• set prices according to the law of demand.

Advances in technology usually

• lower costs and increase supply at all price levels.
• increase cost and increase supply at lower price levels.
• lower costs and increase supply at higher price levels.
• increase cost and decrease supply at all price levels.

The key factor that determines whether the supply of a good will be elastic or inelastic is

• time.
• consumption.
• price.
• output level.

A producer's profits are maximized when marginal costs

• are equal to fixed costs minus variable costs.
• are less than marginal revenue.
• result in decreasing marginal returns.
• are equal to marginal revenue.

Which of the following products is likely to have a built-in excise tax?

• shoes
• apples
• clothing
• high-pollutant gasoline

Which of the following is NOT a fixed cost?

• building construction costs
• rent
• electricity
• property taxes

A subsidy is

• a tax on the production or sale of a good.
• a government payment to support a business or market.
• a form of government regulation.
• illustrated by the market supply curve.