ECONOMICS MR. MILEWSKI SPRING 2011 Chapter#5 Review - Supply Know the following terms: fixed cost variable cost marginal cost total revenue e-commerce law of supply diminishing returns Know the following concepts: What are the two types of supply elasticity? What reasons can cause a decrease in supply? What reasons cause an increase in supply? T or F: The supply curve is downward sloping. An increased government regulations can cause the supply curve to do what? What are the three stages of production? Which part of production allows producers to change only the amount of the variable input called labor? What does the production function show? In what order do the three stages of production occur? What are the stages of production based on? T or F: Cost-benefit decision making that compares the extra benefits to the extra costs of an action is called marginal analysis. The total cost of production is determined by what? What are variable costs? (there are many) When is profit maximized? When employees are getting in each other's way, the firm is operating in which stage of production? What is total cost the sum of? Profits be maximized when marginal revenue equals what? APPLYING SKILLS Using Graphs: Study the graph and answer the questions below. 1. How many cupholders are producers willing to supply at a price of $2.50? 2. How many cupholders are producers willing to supply at a price of $3.00?