05: Supply – Flashcards
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When is it NOT necessary to build a new market supply schedule
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when there is a change in the price of a good
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The measure of the way quantity supplied reacts to a change in price is _____.
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elasticity of supply
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When is it not necessary to build a new market supply schedule?
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when there is a change in the price of a good
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If a firm's product is perishable, where is the firm usually located?
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near its consumers
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In which circumstance is it most likely for a factory to shut down operations?
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when operating cost exceeds total revenue
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What is an effect of farm subsidies that pay farmers to take land out of cultivation?
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Farmers use more pesticides on lands they do cultivate to make up for lost production
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If the total cost of producing 300 leather jackets is $400 and the total cost of producing 301 leather jackets is $435, what is the marginal cost of production at 300 leather jackets?
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35
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The key factor that determines whether the supply of a good will be elastic or inelastic is _____.
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time
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How does a firm calculate its profit?
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total revenue minus total cost
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What does new technology generally do to production?
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It lowers cost and increases supply.
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A graph of the data points in the supply schedule creates which of the following?
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a supply curve
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If the market price for a chair is $24 and the marginal cost for the chair is $7, the marginal revenue from the chair would be _____.
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$24
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What is a market supply schedule?
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a chart that lists how much of a good all suppliers will offer at different prices
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When a business is calculating its operating costs, it must include _____.
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variable costs
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In which example are lower production costs brought about by the use of technology?
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the use of e-mail to replace slower surface mail
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Which circumstance is most likely to cause a farmer to store soybeans for future sale instead of selling them right after harvest?
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Inflation is running at 25 percent.
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Which cost is not a fixed cost?
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electricity
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If supply is elastic, which statement is true?
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Supply reacts strongly to changes in price.
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Which condition leads to an increase in supply?
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a decrease in the cost of raw materials
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What is one way entrepreneurs influence supply?
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technology
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The additional income from selling one more unit of a good, sometimes equal to price, is _____.
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marginal revenue
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If marginal cost becomes higher than price, what happens to a company?
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The company will lose money on each additional unit produced
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What happens when the price decreases in the case of a product that has elastic supply?
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Some producers produce less, and others drop out of the market.
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What is needed to create a supply schedule for a fruit smoothie shop?
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the price charged and the number of smoothies supplied
