Economics
Chapter 5: Supply Test: 60 Points
You will be responsible to know all of the information in the following packets:
- Questions to the video “Is Wal-Mart Good for America”
-- Chapter 5 “Supply” Notes Packet
-- Chapter 5 “Supply Worksheet”
-- Case Study in Supply Questions
The following are possible short answer questions that may appear on your test:
- Explain the “reverse auction” strategy that Wal-Mart uses. Explain the “opening price point” strategy that Wal-Mart uses.
- According to the notes used in class, explain the difference between “the push system” and “the pull system” in today’s economy.
- Is Wal-Mart good for America? Use two examples from the video to support your answer.
- Explain the difference between elastic supply and inelastic supply.
- (a) According to the notes used in class, why do increasing marginal returns occur? (b) According to the notes used in class, when do diminishing marginal returns occur?
- (a) What is the formula for profit? (b) What is the formula for total revenue?
- (a) According to the notes used in class, when is the best level of output? (b) According to the law of supply, explain how businesses respond to price changes.
- According to the notes used in class, why is keeping a money-losing factory open more profitable in certain situations?
- Explain how the price of inputs can cause an increase and decrease in supply.
- According to the notes used in class, explain two reasons why governments subsidize.
- (a) Explain how an excise tax impacts supply. (b)Explain how Government regulation impacts supply.
- (a) Explain how a producer’s future expectations impacts supply. (b) Explain how inflation impacts supply.
- (a) Explain how a technological innovation in another country can increase supply in the United States. (b) Explainhow import restrictions impact supply.
- Explain the difference between a quota system and a tariff.
- According to the case studies article used in class, explain two reasons why free agency in professional supports is justified.
- According to the case studies article used in class, explain two reasons why free agency in professional sports is wrong.
- According to the case studies article used in class, explain how the laws of supply and demand apply to the Beanie Baby phenomena.
++++ Make sure you are able to read production cost charts for your test. Be prepared to answer questions and explain your answers when assessing production cost charts.
++++ Make sure you are able to develop a supply curve using a supply schedule. Make sure you are able to answer questions related to a supply curve.
++++ Make sure you are able to calculate the different statistics that were addressed in class (i.e. total revenue, total cost, marginal cost, and profit)