CAS EC 101 Chapter 3.2: CAS EC 101: Topic 3.2 (Includes Lecture Notes)

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brownraven117

1 Oct 2017

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A higher price with the same technology will pivot the revenue curve up to p"f(l: the marginal revenue from hiring a worker will be higher than what it was before. At this point, the marginal revenue and the marginal cost are no longer equal: therefore, the firm will hire more workers. Not because people want this good more but because the knows that their profits will be hire now if they hire more workers. Variables that shift market supply: price of inputs, most likely factor, an input is anything used in the production of a good or a service. If a price of an input rises, the cost of producing the good rises which means the good will be less profitable at every price. The supply curve of the good will shift to the left. If a price of an input declines, the cost of producing the good decreases which means the good will be more profitable at every price.

Related Questions

a. State the law of supply.

	Quantity supplied rises as price increases, other things are constant. Quantity supplied falls as price decreases, other things are constant.
	Supply increases as price falls. Supply decreases as price rises.
	Supply increases as price increases. Supply decreases as price decreases.
	Quantity supplied rises as price falls, other things constant. Quantity supplied falls as price increases, other things are constant.

b. Why is price directly related to quantity supplied?

	As price rises, consumers substitute other goods whose price has not risen.
	As price rises, suppliers rearrange their activities to supply more of that good to take advantage of the higher price.
	As price falls, suppliers rearrange their activities to supply more of that good to take advantage of the lower price.
	As price rises, suppliers rearrange their activities to supply more of a substitute good to take advantage of the higher price.

silverwhale752

Other things equal, when the price of a good rise, the quantity supplied of the good also rises, and when the price falls, the quantity supplied falls as well. How is the relationship between price and quantity supplied represented?

A. Is represented by a downward-sloping supply curve.

B Is referred to as the law of supply.

C. Applies only to a few goods in the economy.

D. All of the above are correct

lilacantelope929

1-Which variable is NOT a demand shifter?

Select one:

a. price of complements

b. price of substitutes

c. price of raw materials

d. tastes and preferences

2- What does the law of supply state?

Select one:

a. There is a positive relationship between price and quantity supplied.

b. There is a negative relationship between price and quantity supplied.

c. When prices rise, suppliers sell more.

d. When prices rise, buyers buy less of the product.

3- What can cause both equilibrium price and quantity to increase?

Select one:

a. an increase in the price of a complement good

b. a decrease in the population

c. consumer tastes becoming more favorable toward the good

d. an increase in the number of sellers

CAS EC 101 Chapter 3.2: CAS EC 101: Topic 3.2 (Includes Lecture Notes)

CAS EC 101 Full Course Notes

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