Vocab. Supply Determinates of Supply Quantity Supplied Total Product Law of Supply Marginal Product Profit Fixed Cost Supply Schedule Law of Diminishing Returns Supply Curve Variable Cost Elasticity of Supply Total Cost Marginal Cost Reading



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Chapter 4 Reader

Vocab.

Supply Determinates of Supply

Quantity Supplied Total Product

Law of Supply Marginal Product

Profit Fixed Cost

Supply Schedule Law of Diminishing Returns

Supply Curve Variable Cost

Elasticity of Supply Total Cost



Marginal Cost
Reading Questions:


  1. What is the difference between Supply and Quantity Supplied?



  1. What does the law of supply state?



  1. What do supply schedules and curves illustrate?



  1. What kinds of products have an elastic supply cure? Inelastic curve?



  1. According to figure 4.1 on pg. 74, if the price of a car stereo changes from $200 to $300, how much will the quantity supplied change during a given month?



  1. How does the profit motive help direct producers’ use of resources?



  1. What does it mean for a products supply to shift?



  1. What determinants might cause a product’s supply curve to shift?



  1. How does a tax differ from a subsidy?



  1. How can a change in the price of resources affect the supply curve?



  1. If there were a huge crop of apples next year, what would that do to the supply of applesauce next year? Why?



  1. How can technology cause the supply curve to shift?


  1. How might the entry of new airlines into to the travel industry affect airfares?



  1. How can competition contribute to an increase in quantity supplied?



  1. What happens to the supply curve for Valentine candy on February 15th?



  1. Why do producers look at productivity when making supply decisions?



  1. How do varying levels of input affect the levels of output?



  1. How do changes in production costs affect producers’ supply decisions?



  1. Look at Figure 4.5 on pg. 87. How does this production curve reflect the law of diminishing returns at the golden duck company?



  1. Why do producers pay attention to marginal returns?



  1. According to figure 4.6 on pg. 90, at what point are marginal costs lowest for the golden duck company?



  1. How is marginal cost calculated?



  1. What production costs can you identify in the photograph on pg. 91?



  1. According to the law of supply, how will computer chip manufacturers react to falling prices for computer chips?


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