Supply Curve

Identify the correct formula for determining elasticity of supply.

Identify the correct formula for determining profit.

• P = total revenue - total cost

• P = total cost = total revenue

• P = total cost + total revenue

• P = total revenue x total cost

The law of supply states that the higher the price, the lower the quantity supplied.

• True

• False

If both quantity and price are increasing over time, we would expect to see the supply curve

• rise to the right

• rise to the left

• decrease to the right

• decrease to the left

If the government was to stop restrictions that limited the amount of airplanes being produced, the supply of airplanes would most likely

• stay the same

• increase

• decrease

If the cost of resources to make something increases, the price of the good will likely

• stay the same

• decrease

• increase

If supply elasticity is exactly at 1.0, we would call that

• elastic

• inelastic

• unit elastic

If a candy company produces that same product successfully for 50 years, we would guess that their supply elasticity throughout the years would be

• inelastic

• elastic

• unit elastic

Diana sells her economics outline on the black market for $10 a chapter. Customers get the outline electronically delivered to them after purchase. Is she making a profit?

• Yes

• No

Tillie bakes cookies to raise money for her service trip. The box of cookies cost $8 to buy and makes 10 cookies. She sells all of her cookies, each for 50 cents. What is true about Tillie's profit.

• She has successfully made a profit.

• She has just broken even.

• She has not made a profit.