Chapter 5 Exam Review

The most important useful measure of cost is​

• marginal costs.

• fixed costs

• variable costs

• total costs

​Which of these is an example of a fixed cost?

• labor

• delivery charges for output

• depreciation of capital goods

• charges for a factory’s electrical use

Which of these results from the repeal of an item’s subsidies?

• a decrease in the price of that item

• a leftward shift of that item’s supply curve

• a rightward shift of that item’s supply curve

• an increase in reliance upon government regulation

Which of these can be added to determine total costs?

• fixed costs and overhead

• marginal costs and overhead

• fixed costs and variable costs

• fixed costs and marginal costs

Which of these industries has the least elastic supply curve?

• the toy industry

• the nuclear industry

• the automobile industry

• the entertainment industry

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

• the end of Stage I

• the end of Stage III

• the beginning of Stage I

• the beginning of Stage III

Which of these is the best description of a normal supply curve?

• Its slope is completely horizontal.

• Its slope goes up when the diagram is read from right to left.

• Its slope goes up when the diagram is read from left to right.

• Its slope is mostly horizontal, with occasional vertical fluctuations.

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

Because it takes huge amounts of capital and technology to increase nuclear power output, the supply curve for nuclear power is​

• inelastic in the short run.

• elastic in the short run.

• inelastic in the long run.

• unit elastic in the long run.

Which of these is an example of a variable cost?

• raw materials

• interest fees on bonds

• state and local property taxes

• payments on leased properties