COM1 EW Producer Supply #1

Which of the following best describes supply?

• A line graph showing the quantity supplied at different prices

• The amount a consumer is willing and able to buy at different prices

• A table displaying demand data

• A line graph showing the quantity demanded at different prices

Which statement best describes the law of supply?

• As the price of a good increases, the quantity supplied increases (ceteris paribus)

• As the price increases, quantity demanded decreases

• All other factors remain unchanged

• Goods and services used together

What does 'ceteris paribus' mean?

• All other factors remain unchanged

• The reverse is also true

• The price stays constant

• Only one good is produced

Which of the following best describes revenue?

Costs

• The difference between revenue and tax

• Anything given up when a choice is made

• Expenses a producer incurs when making goods or services

• Money kept in the bank by the firm

Profit

• Revenue minus costs

• Total cost of production

• A decrease in sales

• Total income before tax

Productivity

• The rate at which producers can avoid costs

• Output per unit of input

• The total revenue earned

• The number of producers in a market

Subsidy

• A tax placed on producers

• A payment made by the government to lower production costs

• An extra amount producers charge

• A fine imposed for pollution

Indirect Tax

• A tax placed directly on personal income

• A tax on goods and services, paid by producers but passed to consumers

Related Goods in Production

• Goods that are complements

• Goods that are used instead of each other

• Goods that can be produced using the same resources

• Goods demanded by households