Economics Chapter 4 & 5 Test Review

Changes in quantity demanded and changes in price have a(n) _____ relationship.

• indirect
• positive
• inverse
• neutral

Which of these describes an effect of increased government regulation on producers?

• It shifts their market supply curve to the right.
• It shifts their market supply curve to the left.
• It prompts them to increase output at all possible prices.
• It encourages production by requiring the use of new technology.

Which of these measures determines the three stages of production?

• total product
• supply schedule
• change in supply
• marginal product

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 industries has the least elastic supply curve?

• the toy industry
• the nuclear industry
• the automobile industry
• the entertainment industry

Which stage(s) of production are distinguished by increases in output?

• Stage I
• Stages I and II
• Stages II and III
• Stages I, II, and III

What test do economists use to measure elasticity?

• . utility
• revenue
• total expenditures
• demand

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

• a. inelasticity of supply of that item
• b. a repeal of subsidies for production of that item
• c. a shift of the supply curve for that item to the left
• d. a shift of the supply curve for that item to the right

. Why might a producer’s introduction of a new technology result in a brief shift of a product’s supply curve to the left?

• That technology may reduce production costs.
• There may be a period of adjustment to that technology.
• There may be an increase in output despite the same amount of input.
• That technology may increase production more rapidly than expected.

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