Supply 5-1
Supply 5-1 Name____________________________
1. What is supply?
2. Anyone who provides goods or services is a ______________________________.
3. The 2 key words in the definition is _________________ and ________________.
4. What does the law of supply state?
5. As ____________ fall, quality supplied falls and as prices rise __________________
6. Why do price and supply have a direct relation?
7. Why do producers and consumers have different attitudes toward price?
8. What is a supply schedule?
9. What is a market supply schedule?
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10. Why do the farmers want to sell more tomatoes at $2 per pound than at $1 per pound?
11. What is the relationship between a market supply schedule and an individual supply schedule?
12. How is a supply curve related to a supply schedule?
13. What do the points on the supply curve represent?
14. What is the main difference between the two types of curves?
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15. How do price and quantity supplied relate to salaries and labor in the NBA?
16. What effect might a large drop in NBA salaries have on international sales of NBA merchandise?
2. Costs of Production
1. What is marginal product?
2. What is specialization?
3. What does a marginal product schedule show?
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4. At what number of workers is total product highest?
5. On the basis of this table, does it make sense for Janine to hire more than six workers? Explain your answer.
6. Increasing returns occurs due in large part to what? What does this do for the producer?
7. What do diminishing returns mean to a producer?
8. What are some different problems a business might face if it has too few or too many workers?
9. How are the stages of production related to total and marginal product?
10. The goal of all businesses is to make ___________________.
11. _____________________ are expenses that the owners of a business must incur whether they produce nothing, a little or a lot.
12. _______________________ are business costs that vary as the level of production output changes.
13. Adding fixed and variable costs together is known as ______________________.
14. The cost of additional cost of producing one more unit of their product is known as _____________________________________
15. Does change in the number of workers affect fixed costs or variable costs? Why?
16. How do changes in variable costs relate to the slope of the supply curve?
17. What does marginal mean in economic term?
18. Total Revenue represents _______________________________________________.
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19. How do the variable costs change when the total product increases from 7 pairs to 1 pairs?
20. When Janine has no workers, why are her fixed and total costs the same?
21. Why is it important for a producer to compare marginal revenue to marginal cost at each level of production?
22. The level of production where a company realizes the greatest amount of profit is known as ______________________________________.
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23. How does Janine calculate her total revenue and profits when she produces 42 pairs of jeans?
24. What happens to Janine’s profits when she increases production from 66 to 67 pairs of jeans? Why does this happen?
25. If the price of jeans increased to $22 per pair, how would it affect Janine’s total revenue and profit?
26. Categorize the following costs incurred by a bookstore owner:
Account, Electricity for extra holiday hours, wages, clerks’ insurance, managers’ salary, purchase of books, rent telephone.
Fixed Variable
27. You own a video store that has total costs of $3,600.00 per month. If you charge $12 for each DVD you sell, how many do you need to sell each month in order to break even. How did you arrive at that answer?
3. Factors That Change Supplies
Complete the chart below using the information found in the chapter.
|Factor That Changes Supply |Reason Why Supply Changes |
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28. What else besides raw materials would be included in input costs?
29. Why does the supply curve shift?
30. Why do excise taxes and subsidies affect supply differently?
31. Why do you think governments want to influence the supply of alcohol and tobacco products by imposing excise taxes?
32.
s
4. What is Elastic Supply?
33. What does elasticity of supply measure?
34. Why is supply more elastic over a year than over a month?
35. Why are service industries more likely to have elastic supply than manufacturing businesses?
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36. If the price of leather rose dramatically for the boots in figure 5.15, how might this affect elasticity of supply?
37. In the U.S., would the supply of corn oil be more elastic than the supply of olive oil? Why or why not?
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