Chapter 5

Which of these would an item's producer be most likely to do if total revenue on that item began to drop?

• produce less of that item

• produce more of that item

• raise the price of that item

• lower the price of that item

Which of these best describes the influence of high prices on the behavior of producers?

• high prices are an incentive for producers to produce less

• high prices are an incentive for producers to produce more

• high prices have no significant influence on the behavior of producers

• high prices influence producers to use fewer raw materials and less labor

Which of these industries has the least elastic supply curve?

• the toy industry

• the nuclear industry

• the automobile industry

• the entertainment industry

Which of these do producers of an item hope to achieve when adopting new technologies?

• inelasticity of supply of that item

• a repeal of subsidies for production of that item

• a shift of the supply curve for that item to the left

• a shift of the supply curve for that item to the right

At which stage of production does the concept of "diminishing returns" first become significant?

• Stage I

• Stage II

• Stage III

• it is significant throughout the production process

At which point in the stages of production does the maximum profitable number of workers become most apparent?

• the end of Stage I

• the beginning of Stage I

• the end of Stage II

• the beginning of Stage III

Which term denotes the change in total income when one additional unit of output is added?

• total product

• supply schedule

• change in supply

• marginal revenue

Which two terms are the most similar in meaning?

• fixed costs and overhead

• variable costs and overhead

• marginal costs and fixed costs

• marginal costs and variable costs

Which term is generally associated with machines and other capital goods?

• total costs

• fixed cost

• variable cost

• marginal cost

Which of these best enables a firm to establish its profit-maximizing quantity of output?

• a periodic marginal analysis

• a periodic analysis of total revenue

• a periodic determination of its overhead

• a periodic determination of its break even point