Changes in Supply

What is the effect of lower input costs?

• decreased marginal cost

• higher revenues

• lower supply

• reduced profits

How do subsidies help producers?

• they decrease costs

• they increase revenues

• they increase foreign competition

• they remove regulations

Which of the following government actions would increase the supply of cars in the UnitedStates?

• the establishment of an excise tax on cars

• an end to subsidies to automakers

• the removal of car mileage regulations

• the establishment of quotas on imported cars

Which factor would shift the supply curve for ethanol in the United States to the right?

• an American ban on ethanol from all producers

• an excise tax placed by government on ethanol use

• the removal of subsidies from the government to all American ethanol producers

• a trade agreement with Brazil opening U.S. markets to imported ethanol

A new film company’s decision to locate its operations in the film-production center ofSouthern California is most similar to which of the following?

• a firm locating close to the inputs of its product

• a firm locating close to its consumers

• a firm trying to escape government regulation

• a firm trying to remove a sudden spike in the costs of its inputs