Chapter 5 Review
*What is the definition of Supply?
*What is the definition of the Law of Supply?
*The Law of Supply takes into account what two groups of producers?
*What is a Market Period?
*Draw the Supply Curve for the following periods.
Market Period
Short Run
Long Run
*What is the definition of a Short Run?
*What three things does a Short Run Supply Curve show?
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*Which definition matches up the three Elasticity of Supply?
>when supply is very sensitive to price change.
>when a percentage change in price is perfectly matched by an equal percentage change in QS
>when supply is not responsive to price change.
Unit Elastic Supply –
Inelastic Supply –
Elastic Supply #######################################################
*What determines whether the supply of a good will be elastic or inelastic?
*In the Short Run, why would a firm be Inelastic?
*In the Long Run, why would a firm be elastic?
*What is the definition of Marginal Product?
*What is the definition of Fixed Costs?
*What is the definition of Variable Costs?
*What are the four parts that make up the Fixed Costs for a producer?
*What are the three parts that make up the Variable Costs for a producer?
*What is the definition of Total Costs?
What is the definition of Marginal Costs?
*What is the definition of Marginal Revenue?
*What is the definition of Total Revenue?
*What formula does a company use to determine their Profit?
*Which Stage of Production matches with the following descriptions?
> total production keeps growing, but by smaller and smaller amounts.
> too much input - total output decreases as input increases -MP is negative.
> increasing returns as the number of workers increase they better use of their time, machinery,
and resources.
*What happens to Supply when a producer has a rise in the cost of an input?
*What happens to Supply when a producer has
*What five factors affect the movement of the Supply Curve?
*What happens to the Supply Curve when the government places a tax on a product?
*What is the definition of Inflation?
Marginal Product Examples
# or
Workers
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Total
0
7
18
32
50
72
100
125
149
165
174
181
184
188
187
184
Marginal
Product
-7
Stage
---I
Clayware’s Production Schedule
# of
Fixed
Variable
Total
Bowls
Cost
Cost
Cost
Cost
Revenue
Revenue
Profit
0
$22
$0
$22
----
$0
$0
($22)
$5
$30
$30
($3)
1
$5
2
$8
3
$10
4
$14
5
$19
6
$26
7
$36
8
$48
9
$65
10
$87
11
$100
*Sale of each Bowl is $ 30.00
Marginal Marginal
Total