Unformatted text preview: cost,
or per-unit cost, of a house?
2. Firm A sold 400 stereos for a total of $200,000,
and firm B sold 550 stereos for a total of
$275,000. Which firm is charging more per
unit? Graph the supply curve.
3. If the percentage change in price is 5 percent
and the percentage change in quantity supplied
is 10 percent, calculate the elasticity of supply.
4. Currently the price of a good is $10, and the
quantity supplied is 300 units. For every $1
increase in price, quantity supplied rises by 5
units. What is the quantity supplied at a price
of $22? Use Exhibit 5-8 to answer the following questions.
P = price, and Qs = quantity supplied.
1. What does Exhibit 5-8(a) represent?
2. Which part of Exhibit 5-8 represents a change
in supply due to technological advancement? 5-8 EXHIBIT S2 S1 S1 S S2
A Qs 0
(a) (b) (c) 3. What does Exhibit 5-8(c) represent?
4. Which part of Exhibit 5-8 represents a change
in supply due to an increase in resource prices? Solving Economic Problems 1. Application. The law of supply pertains to
many goods. For example, if the price of shoes
rises, in time the quantity supplied of shoes will
rise, too. Devise an experiment to test whether
studying for an economics test is subject to the
law of supply.
2. Cause and Effect. Explain the process by
which a tax, applied to the production of a
good, changes the supply of the good. Go to www.emcp.net/economics and choose Economics:
New Ways of Thinking, Chapter 5, if you need more help in
preparing for the chapter test. Chapter 5 Supply 127...
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