1. At the end of this spring there was an increase in the supply of strawberries in Massachusetts. Which of the following would explain why? (Select all that apply.)

	a.	Growing season in New England.
	b.	Decreased wages of strawberry pickers.
	c.	Harvesting tractors recalled due to defect.
	d.	Large decrease in gas prices
	e.	Some strawberry fields forced closed for social distancing rules.
	f.	Increase in price of strawberryjellies and jams

2. If a firm's fixed costs increase without changing the variable costs, then for a constant price, the firm's...

	a.	Output decision would not change
	b.	Average total cost function shifts down and to the right
	c.	Economic profits increase
	d.	Shutdown point changes

3. Every May, the average ice cream shop in Maine has $500 in fixed costs. At a price of $1 per scoop of ice cream, they can expect 1,000 scoops demanded. These 1,000 scoops are associated with $800 of variable costs. What should an ice cream shop owner do in the short run (assuming a highly competitive industry)?

	a.	Exit the industry.
	b.	Sell 1,000 scoops of ice cream
	c.	Sell no ice cream/produce zero units (shut down).
	d.	Increase the price.

4. Match each statement with its outcome for the supply of Boston-Philadelphia flights.

	Price of airfare increases.
	Decrease in the price of jet fuel.
	New FAA regulations decrease taxi time, and time between flights.
	Increase in the wages to flight attendants.
	Airlines divert flights to other routes.
	Increase in the price of checked luggage.

A.	Movement along the supply curve: quantity supplied decreases.
B.	Supply shifts outward.
C.	Movement along the supply curve: quantity supplied increases.
D.	No change to supply.
E.	Supply shifts inward.

5. If a firm wants to increase output, the law of diminishing returns implies...

	a.	Average total costs will eventually rise
	b.	Total costs start to fall
	c.	Average total costs will eventually fall
	d.	Fixed costs get spread out over a greater quantity

6. Identify the category of costs (sunk, fixed, or variable) for each type of cost for the Pavement Coffeehouse location across from the GSU (output is food and beverage transactions).

The cost to design the store layout is ------ cost.

Putting up fliers and advertisments around campus are ------- costs.

Bagels,cream cheese, coffee beans, etc. are all ------ costs.

The point-of-sale computer screens are ---- costs.

The workers' hourly wage is a ---- cost.