If a 1 percent change in price results in a 2 percent change in the quantity of the

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms will not be used._____ 1. A period of time during which at least one of a firms resources is fixeda. competitive firms supply curve b. economies of scale c. elasticity of supply d. fixed cost e. law of diminishing returns f. law of supply g. long run h. long-run average cost curve i. marginal cost j. marginal product k. marginal revenue l. short run m. supply n. supply curve o. total cost p. total product q. variable cost

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms will not be used._____ 2. The change in total revenue from selling another unit of a producta. competitive firms supply curve b. economies of scale c. elasticity of supply d. fixed cost e. law of diminishing returns f. law of supply g. long run h. long-run average cost curve i. marginal cost j. marginal product k. marginal revenue l. short run m. supply n. supply curve o. total cost p. total product q. variable cost

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms will not be used._____ 3. Any cost that does not change with the amount produced in the short runa. competitive firms supply curve b. economies of scale c. elasticity of supply d. fixed cost e. law of diminishing returns f. law of supply g. long run h. long-run average cost curve i. marginal cost j. marginal product k. marginal revenue l. short run m. supply n. supply curve o. total cost p. total product q. variable cost

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms will not be used._____ 4. A period of time during which all of a firms resources can be varieda. competitive firms supply curve b. economies of scale c. elasticity of supply d. fixed cost e. law of diminishing returns f. law of supply g. long run h. long-run average cost curve i. marginal cost j. marginal product k. marginal revenue l. short run m. supply n. supply curve o. total cost p. total product q. variable cost

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms will not be used._____ 5. The change in total cost resulting from producing one more unit of output.a. competitive firms supply curve b. economies of scale c. elasticity of supply d. fixed cost e. law of diminishing returns f. law of supply g. long run h. long-run average cost curve i. marginal cost j. marginal product k. marginal revenue l. short run m. supply n. supply curve o. total cost p. total product q. variable cost

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms will not be used._____ 6. Any production cost that changes as output changesa. competitive firms supply curve b. economies of scale c. elasticity of supply d. fixed cost e. law of diminishing returns f. law of supply g. long run h. long-run average cost curve i. marginal cost j. marginal product k. marginal revenue l. short run m. supply n. supply curve o. total cost p. total product q. variable cost

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms will not be used._____ 7. A measure of the responsiveness of the quantity of a product supplied to a change in pricea. competitive firms supply curve b. economies of scale c. elasticity of supply d. fixed cost e. law of diminishing returns f. law of supply g. long run h. long-run average cost curve i. marginal cost j. marginal product k. marginal revenue l. short run m. supply n. supply curve o. total cost p. total product q. variable cost

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms will not be used._____ 8. The change in total product that results from an increase of one unit of resource inputa. competitive firms supply curve b. economies of scale c. elasticity of supply d. fixed cost e. law of diminishing returns f. law of supply g. long run h. long-run average cost curve i. marginal cost j. marginal product k. marginal revenue l. short run m. supply n. supply curve o. total cost p. total product q. variable cost

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms will not be used._____ 9. As more of a variable resource is added to a given amount of fixed resources, marginal product eventually declines and could become negativea. competitive firms supply curve b. economies of scale c. elasticity of supply d. fixed cost e. law of diminishing returns f. law of supply g. long run h. long-run average cost curve i. marginal cost j. marginal product k. marginal revenue l. short run m. supply n. supply curve o. total cost p. total product q. variable cost

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms will not be used._____10. Forces that reduce a firms average cost as the firms size growsa. competitive firms supply curve b. economies of scale c. elasticity of supply d. fixed cost e. law of diminishing returns f. law of supply g. long run h. long-run average cost curve i. marginal cost j. marginal product k. marginal revenue l. short run m. supply n. supply curve o. total cost p. total product q. variable cost

Choose the term that best fits the definition. On a separate sheet of paper, write the letter of the answer. Some terms will not be used._____11. The total output of a firma. competitive firms supply curve b. economies of scale c. elasticity of supply d. fixed cost e. law of diminishing returns f. law of supply g. long run h. long-run average cost curve i. marginal cost j. marginal product k. marginal revenue l. short run m. supply n. supply curve o. total cost p. total product q. variable cost

A shift of a products supply curve will be caused by each of the following except a. an increase in the cost of the resources used to produce the product. b. an improvement in the technology used to produce the product. c. an increase in consumer demand for the product. d. a decrease in the price of other products that resources could be used to produce.

True or False If a products elasticity of supply is 0.8, a 2 percent increase in price will cause a greater than 2 percent increase in the quantity supplied.

Typically, the longer the period of time allowed for firms to adjust to a price change, the __?__ a products supply curve will be.

Which of the following events would cause the supply curve to shift to the left? a. A firms employees negotiate a 5 percent increase in their wages. b. A firms managers buy new, more efficient machinery for workers to use. c. A firm provides its workers with training to better use their tools. d. A firm finds a new, less expensive source of raw materials.

An increase in the price of a firms product will cause __?__ the firms supply curve.

True or False In the long run, all costs of production are variable.

An increase in the price of a product will cause __?__ the supply curve for that product.

If a firm experiences diminishing returns, it finds that a. there will be no increase in production when it hires another worker. b. the next worker hired will add less to production than the previous worker hired. c. it will earn no profit if it hires additional workers. d. it must lay off workers to earn a profit.

Which of the following is an example of a variable cost? a. the cost or wages for night security guards b. the cost of fire insurance for a firms factory c. the cost of raw materials used to produce goods d. the cost of electricity to operate a security alarm.

In the short run, __?__ cost does not change as a firm produces additional output.

True or False When a firm experiences diminishing returns, its marginal cost of production decreases as output increases.

__?__ are forces that reduce a firms average cost of production as the firm grows in size.

If a 1 percent change in price results in a 2 percent change in the quantity of the product that is supplied, the supply of that product is a. elastic. b. unit elastic. c. inelastic. d. none of the above.

A producers __?__ is the change in its total revenue that results from selling one more unit of a product.

True or False The law of supply states that the quantity supplied will increase as the price of that product increases.

In the long run, a firm will a. experience economies of scale if its longrun average cost curve slopes up. b. experience diseconomies of scale if its long-run average cost curve slopes down. c. experience diseconomies of scale if its long-run average cost curve slopes up. d. experience constant returns to scale if its long-run average cost curve slopes up.

True or False On the left side of a firms long run average cost curve, its average cost declines as production increases.

A firm has the following marginal costs at different levels of production. If it is able to sell all the products it can produce at $5 each, how many will it produce? Explain your answer.

The lowest long-run average cost for whatsits is $50 per unit. To take advantage of economies of scale and produce whatsits at this low cost, a firm would need to build a factory that could produce 5,000,000 whatsits per year. There are only 20,000 people who are willing to pay anything to buy a whatsit per year. Why wont a large whatsits factory be built?

Calculating Elasticity of Supply Complete the table below by calculating each missing elasticity of supply value. Is the supply elastic or inelastic?

Sharpen Your Skills: Cause and Effect During the summer of 2003, Americans were warned that shortages of natural gas could cause its price to increase by 50 percent or more during the following winter. Natural gas is a key ingredient in the production of artificial fertilizer. Much of the fertilizer used by U.S. farmers during the spring of 2004 was produced during the preceding winter. If the cost of producing this fertilizer increased as predicted, what would have happened to the location of the supply curve for agricultural products in 2004? Explain your answer.

Accounting Classify each of the following costs as variable or fixed. Explain your decision for each cost. The cost of a leased delivery truck The cost of a night security service The cost of delivering finished products The cost of fire insurance The cost of electricity used to run production machinery

Access EconData Online at thomsonedu.com/school/econxtra. Read the article entitled Labor Cost Per Unit of Output. Find the answers to the following questions from the article: (1) What is the relationship between labor productivity and workers compensation insurance? (2) Why is labor cost an important indicator of trends in production costs? Write your answers in complete sentences on a sheet of paper.