Suppose That at Prices of $1, $2, $3, $4, and $5

question 27

Multiple Choice

Suppose that at prices of $1, $2, $3, $4, and $5 for product Z, the corresponding quantities supplied are 3, 4, 5, 6, and 7 units, respectively. Which of the following would increase the quantities supplied of Z to, say, 6, 8, 10, 12, and 14 units at these prices?

• A)improved technology for producing Z
• B)an increase in the prices of the resources used to make Z
• C)an increase in the excise tax on product Z
• D)increases in the incomes of the buyers of Z

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Definitions:

Production Function

An equation that describes the maximum output of a firm, given the quantity of inputs it uses, illustrating the relationship between inputs and outputs.

Isoquant

A curve representing all combinations of inputs that produce the same level of output in production theory.

Output

The amount of goods or services produced by a person, machine, factory, or system over a certain period.

Production Function

A mathematical model that describes the relationship between inputs used in production and the output of goods or services.