WorksheetsChapter 5: Supply Test
Total questions: 25
Worksheet time: 37mins
The price of home computers rises. According to the law of supply, manufacturers will respond to this price increase by
increasing computer production.
decreasing computer production.
halting computer production.
keeping computer production steady.
A sudden increase in fuel costs sparks a rise in both prices and demand for fuel-efficient cars. Yet it takes months for car companies to manufacture more cars. In this case, the supply for cars is
inelastic.
elastic.
static.
inferior.
Please use the chart to answer the following question. In order to maximize marginal returns, how many workers should the factory have making these shoes?
2
4
6
8
Please use the chart to answer the following question. When the eighth worker is hired, the marginal product of labor becomes negative. This is because...
the workers are making more shoes than the demand.
the need for a greater supply of shoes has decreased.
there are fewer workers available to make more shoes.
there are more workers than are needed, disrupting output.
An example of fixed costs would include...
rent
labor
raw materials
heating fuel
Which of these events would indicate a movement along a supply curve for batteries?
A new law requires battery manufacturers to spend more money on environmentally safe batteries.
Workers at a major battery factory go on strike and stop production.
Battery manufacturers raise the price of a package of AA batteries from 3.50to 3.95.
A new trade agreement enables stores to import foreign batteries.
If the supply of a good is inelastic, producers will:
not change quantity supplied much if prices double.
raise quantity supplied with a small price increase.
increase quantity supplied in response to sharp drops in price.
have diminishing marginal returns of labor.
A paper mill has fixed costs of 10,000 dollars per hour and variable costs of 4,000 dollars per hour. What will happen to these costs if the mill closes?
Both fixed and variable costs will remain the same even if output halts.
The mill will no longer incur any costs because it will be closed.
The fixed costs will decrease, but the variable costs will increase.
The variable costs will drop to zero, but the fixed costs will stay the same.
On a dairy you worked at this summer, the farmer had ten dairy cows. Her feed costs went up, but milk production stays the same. What effect did this have on her supply?
None, supply will remain the same although she will raise prices to make up the lost revenue.
Her supply will go down, because her fixed costs have risen.
Her supply will go up, because she won’t sell as much milk.
Supply will remain the same, but she will have to sell more.
WalMart is considering using e-mail and social media instead of shipping printed materials to workers. How will this move affect WalMart?
Costs will drop, but supply will remain the same.
Supply and costs will probably both decrease.
It should lower costs and increase supply.
At first, supply will rise, but then it will decrease.
Students have been studying how the invention of the airplane affected the supply of imported goods from other continents by:
Increasing the speed and efficiency of transportation
Decreasing the demand for imported goods
Eliminating the need for sea transport
Reducing the cost of production
The Minute Made orange juice company is trying to decide where to locate a new processing and bottling plant. It must choose between Florida, near the orange groves, or Oregon, near its largest market. The cost of shipping bottled juice from Florida to Oregon is lower than the cost of shipping oranges. Where should the company locate the plant?
Florida
Oregon
both options would cost the producer the same
neither option is a viable choice for the producer
When the government increases taxes on automobile producers we would expect to see the supply curve shift in which direction?
up
down
left
right
If producers of game day t- shirts would expect the two biggest football rivalries were playing for the state title next week, his supply curve would shift which direction?
up
down
left
right
My wife and I run a simple business selling boxed lunches to our local school system on Wed- Friday. My wife gets sick and is not able to help me get the food ready for delivery on those days. A supply curve for my business would shift which direction?
up
down
left
right
The additional income a producer receives for selling one more unit of a good is called
marginal revenue
marginal costs
fixed costs
increasing marginal returns
A tax on the production or sale of a god is referred to as a ___________ tax.
income
sales
property
excise
A chart a that lists the amount of products a producer will offer at each and every price is a __________________.
demand schedule
supply schedule
demand curve
supply curve
A graph of the quantity supplied by producers at each price is a ________ curve.
demand
supply
regulation
elasticity
Costs that rise or fall depending on the quantity of a product produced.
fixed costs
variable costs
total costs
subsidies
In Stage 2, the marginal product of labor falls as the number of workers hired goes up.
increasing marginal returns
marginal revenue
diminishing marginal returns
total cost
I own my own business but I am having trouble tracking costs. What is it called when I add my fixed costs and variable costs?
total costs
profits
increasing marginal returns
overhead
The amount of goods available in a market
supply
supply schedule
supply curve
demand
A government payment that supports a business or a specific market.
excise tax
sales tax
regulations
subsidy
A government intervention in a market that affects the production of a good.
income tax
sales tax
regulation
subsidy
