Chapter Five: Economics - Supply

Who is a producer?

• A manufacturer of goods

• a provider of financial backing

• a buyer of goods or services

• a provider of goods or services

According to the Law of Supply, when prices decrease

• quantity supplied decreases

• quantity supplied increases

• supply decreases

• supply increases

A supply schedule is related to a supply curve because

• the supply shedule shows the data from the supply curve in graphic form

• the supply curve shows the data from the supply schedule in graphic form

• the supply schedule shows the data from many supply curves

• the supply curve shows the data from many supply schedules

What does a marginal product schedule show?

• the relationship between total product and marginal product

• the relationship between labor and marginal product

• the amount of specialization

• the level of profit

Which item shows all fixed costs?

• mortgage, shipping, wages

• business licenses, mortgage, shipping

• insurance, resources, utilities

• business licenses, insurance, mortgage

Which of the following is a variable cost?

• raw materials to make products

• rent for a storage warehouse

• cost of utilities after hours

• managerial salaries

How is managerial cost calculated?

• Change in total cost divided by change in total product

• change in total product divided by change in total cost

• fixed costs plus variable costs divided by product

• fixed costs plus variable costs multiplied by product

How does a business calculate total profit?

• hiring more workers

• firing less experienced workers

• providing training for workers

• providing bonuses to workers

A business that discovers a decline in profit can best solve the problem by

• firing any workers who were hired since the business had maximum profits

• hiring more workers until the former level of profit is reached

• creating a production costs schedule to find the point when increasing returns change to diminishing returns

• creating a production costs and revenues schedule to find the profit-maximizing output

You own a small bakery that supplies cheesecakes to local restaurants. Which of the following actions is most likely to help you increase supply quickly?

• buy a new oven that bakes more cheesecakes simultaneously

• research to find a cheaper long-distance shipper you can use

• apply for a government subsidy for producers of dairy products

• train your chefs in how to beat the batter to a smoother consistency