STUDY GUIDE FOR CHAPTER 5: DEMAND & SUPPLY PART II

PART I DIRECTIONS:
1.
2.

Below is a list of terms pertaining to Chapter 5: DEMAND & SUPPLY

In your notebook give the definition for each term:
Supply, law of supply, supply schedule, market supply schedule, market supply curve, fixed costs,
variable cost, total costs, marginal costs, diminishing returns, marginal revenue, total revenue,
change in quantity supplied, change in supply, input costs, regulation, excise tax, elasticity of
supply.

PART II DIRECTIONS:
1.

Listed below are questions about DEMAND & SUPPLY.

2.

PLEASE WRITE ANSWERS IN YOUR NOTEBOOK!

1. What two requirements of supply must someone meet to be considered a producer?
2. What does it mean to say that quantity supplied and prices have a direct relationship?
3. What is the relationship of total costs to profit?
4. What is the difference between change in quantity supplied and change in supply?
5. How is elastic and inelastic supply different?
6. Lists the four measures of costs.
7. The two most important measures of output are?
8. Three stages of production are?
9. Describe the four measures of cost: total cost, fixed cost, variable cost and marginal cost.
10. Supply elasticity describes what?

STUDY GUIDE FOR CHAPTER 5: DEMAND & SUPPLY PART II

PART III PLEASE WRITE ANSWERS IN YOUR NOTEBOOK!

Choose the key concept that best completes the sentence. Not all key concepts will be used.
BREAK-EVEN

CHANGE IN

CHANGE IN

POINT

QUANTITY

SUPPLY

DIMINISHING

SUPPLIED
ELASTICITY OF

FIXED COSTS

INCREASING

RETURNS
INPUT COSTS

SUPPLY
LAW OF SUPPLY

MARGINAL COST

RETURNS
MARGINAL

PROFIT

PRODUCT
SUPPLY

MARGINAL

PRODUCTIVITY

REVENUE
SUPPLY CURVE

VARIABLE COST

MAXIMIZING
SUPPLY

OUTPUT
TOTAL PRODUCT

TOTAL REVENUE

SCHEDULE

_______ is the quantity of a product that producers are willing and able to offer
for sale. According to the ________, when price increases, quantity supplied
increases, and when prices decreases, quantity supplied decreases. Quantity
supplied can be displayed on a chart called a ______ or on a graph called a
__________.
________ is the change in ______ caused by hiring one additional worker.
When marginal product begins to decrease, production is in the stage of
________ .
Total cost is the sum of ________ and variable costs.

STUDY GUIDE FOR CHAPTER 5: DEMAND & SUPPLY PART II

_______ is the additional cost of producing one more unit. When marginal cost
equals ________, a company has reached __________.
A ________ occurs when producers are willing to sell different amounts of a
product at every price. The six factors that change supply are input costs,
________, technology, government action, producer expectations, and number of
producers.
The term _______ describes how responsive producers are to price changes.
It is measured by comparing ________ to change in price.