Chapter 5: Supply

Supply is defined as

• the willingness and ability of consumers to purchase goods and services

• the willingness and ability of the government to offer protections to citizens

• the willingness and ability of producers to offer goods and services for sale

• the willingness and ability of laborers to work for producers for pay

According to the law of supply, when prices increases,

• demand increases

• quantity demanded increases

• supply increases

• quantity supplied increases

Economists use a supply curve to

• show the law of supply in chart form

• show the law of supply in graph form

• show the law of supply in table form

• show the law of supply in a written description

The appearance of a supply curve is

• an upward slope, bottom left to top right

• a downward slope, top left to bottom right

• a horizontal line

• a vertical line

The change in total output that results from hiring one additional worker is called

• marginal cost

• marginal labor

• marginal product

• marginal revenue

The additional expense of producing one more unit of a product is called

• marginal cost

• marginal labor

• marginal product

• marginal revenue

Business owners decide on the right number of workers by analyzing data to learn when

• diminishing returns change to increasing returns

• profit-maximizing output is reached

• total cost equals total revenue

• variable costs get too high

The difference between fixed costs and variable costs is that

• fixed costs depend on outside forces; variable costs depend on internal forces

• fixed costs remain the same; variable costs are determined by fixed costs

• fixed costs remain the same; variable costs depend on how much is produced

• fixed costs are always low; variable costs are always high

Total cost is the sum of

• fixed costs and marginal cost

• fixed costs and variable costs

• marginal cost and variable costs

• fixed, marginal, and variable costs

Profit-maximizing output is the point at which

• increasing returns change to diminishing returns

• variable costs change to fixed costs

• marginal revenue and total revenue are equal

• marginal revenue and marginal cost are equal