Name ______________________
Quiz Date / Due Date __________
Supply
Chapter 5 Study Guide
Directions: Referring to your text, read pages 100-122, and answer the following
questions. Use this as a reference when studying for the chapter quiz, and be prepared to
turn it in for credit prior to taking the quiz.
Section 1
1. According to the law of supply, the higher the price, the larger the
________________ ____________________.
2. What two movements combine to create the law of supply?
__________________________________________________________________
__________________________________________________________________
3. What drives the producer’s decision to supply more of a product? _____________
4. Factors that can change are called _________________________.
5. The relationship between price and quantity supplied for a specific good is shown
by a ____________ _____________________.
6. When the data points in the supply schedule are graphed, they create a _________
______________.
7. A measure of the way suppliers respond to a change in price is known as
______________ ____ ______________.
8. The key factor in determining whether supply is elastic or inelastic is _________.
9. What is an example of a business that would have inelastic supply?
___________________________________________________.
10. What is an example of a business that would have elastic supply?
___________________________________________________.
Section 2
11. When suppliers are trying to figure whether or not it is profitable to add new
employees, the level of production in which the marginal product of labor
increases as the number of workers increases is known as __________________
_______________ _______________.
12. When suppliers are trying to figure whether or not it is profitable to add new
employees, the level of production in which the marginal product of labor
decreases as the number of workers increases is know as ___________________
______________ ________________.
13. When dealing with production costs, those that do not change no matter how
much of a good is produced are known as _______________ _______________.
14. When dealing with production costs, those that rise and fall depending upon how
much of a good is produced are known as ________________ ______________.
15. The additional cost of producing one more unit is called the ________________
__________________.
16. How is profit determined? ______________ _____________ minus
_______________ ___________.
17. The additional income from selling one more unit of a good is called the
_________________ _________________.
18. The cost of operating a store or factory is known as the _______________
__________.
Section 3
19. Identify three possible changes in the cost of an input used to produce a good.
__________________, _____________________, or ___________________
20. When prices rise, if a firm has no control over the price, the only solution is to do
what? _________________________ and lower _______________ _________
until marginal cost equals the lower price.
21. What would be an example of how input costs might lower? _________________
22. A government payment that supports a business or market is known as a
___________________.
23. What type of tax is added into the sale price of a good? _____________________
24. Give two examples of products that carry excise taxes. _____________________
_______________________
25. When the government intervenes in a market to affect price, quantity, or quality
of a good sold, it is known as ________________________.
26. Besides prices and the government, name another factor that can influence supply.
_________________________________________________________________
Carefully read the summary of Chapter 5 on page 122.
On page 122, answer the Key Terms matching questions.
1. _________________________________
2. _________________________________
3. _________________________________
4. _________________________________
5. _________________________________
6. _________________________________
7. _________________________________