6) Consider a single bakery that has an upward sloping supply curve for chocolate cake.Suppose the price of chocolate cake does not vary and remains constant at $15.What will happen if a new oven is invented, that makes it much cheaper for the bakery to produce chocolate cakes?

A) The supply curve will shift to the left.

B) The supply curve will shift to the right.

C) The firm will desire to produce a level of output characterized by a movement up the supply curve.

D)The firm will desire to produce a level of output characterized by a movement down the supply curve.

7) Consider a single bakery that has an upward sloping supply curve for chocolate cake.Suppose the price of chocolate cake does not vary and remains constant at $15. This bakery makes both lemon and chocolate cakes. What will happen to the supply curve for chocolate cakes if the price of lemon cakes increases?

A) The supply curve for chocolate cakes will shift to the left.

B) The supply curve for chocolate cakes will shift to the right.

C) The firm will desire to produce a level of output characterized by a movement up the supply curve for chocolate cakes.

D)The firm will desire to produce a level of output characterized by a movement down the supply curve for chocolate cakes.

8) Consider a single bakery that has an upward sloping supply curve for chocolate cake.Suppose the price of chocolate cake does not vary and remains constant at $15. What will happen if the government requires the firm to pay a $2 tax for every chocolate cake that it sells?

A) The supply curve will shift to the left.

B) The supply curve will shift to the right.

C) The firm will desire to produce a level of output characterized by a movement up the supply curve.

D)The firm will desire to produce a level of output characterized by a movement down the supply curve.

9) Consider a single bakery that has an upward sloping supply curve for chocolate cake.Suppose the price of chocolate cake does not vary and remains constant at $15. What will happen if the government gives the bakery a subsidy of $1.50 for every chocolate cake that it sells?

A) The supply curve will shift to the left.

B) The supply curve will shift to the right.

C) The firm will desire to produce a level of output characterized by a movement up the supply curve.

D)The firm will desire to produce a level of output characterized by a movement down the supply curve.

Use the following table to answer the next several questions.

PriceQuantity of chocolate cake produced by a single bakery

$20150

$18140

$16130

$14120

$12110

$10100

10) If the price of a chocolate cake is $14, how many chocolate cakes will the bakery produce?

A) 110

B) 120

C) 130

D) 140

E) 330

11) If the price of a chocolate cake is $18, what is the bakery's producer surplus for the 120^th chocolate cake that it sells?

A) $3

B) $4

C) $5

D) $10

E) $20

12) If the price of a chocolate cake is $18, what is the bakery's producer surplus for the 130^th chocolate cake that it sells?

A) $1

B) $2

C) $10

D) $20

E) $50

13) If the price of a chocolate cake is $16, what is the bakery's producer surplus for the 130^th chocolate cake that it sells?

A) $0

B) $1

C) $2

D) $10

E) $20

14) Suppose the market supply curve for ice cream cones is upward sloping, and the price of an ice cream cone is constant and remains at $5 a cone.Suppose the price of sugar (an input) increases.The supply curve of ice cream cones will shift to the _____ and the firms will produce _____ ice cream cones.

A) left, more

B) left, fewer

C) right, more

D) right, fewer

15) Suppose the market supply curve for ice cream cones is upward sloping, and the price of an ice cream cone is constant and remains at $5 a cone.Suppose the number of ice cream shops doubles. The supply curve of ice cream cones will shift to the _____ and the firms will produce _____ ice cream cones.

A) left, more

B) left, fewer

C) right, more

D) right, fewer

16) Suppose the market supply curve for ice cream cones is upward sloping, and the price of an ice cream cone is constant and remains at $5 a cone.Suppose half of the ice cream shops go out of business.The supply curve of ice cream cones will shift to the _____ and the firms will produce _____ ice cream cones.

A) left, more

B) left, fewer

C) right, more

D) right, fewer

17) Suppose the market supply curve for ice cream cones is upward sloping, and the price of an ice cream cone is constant and remains at $5 a cone.Assume that stores that sell ice cream cones also sell milk shakes.Suppose the price of milk shakes increases.The supply curve of ice cream cones will shift to the _____ and the firms will produce _____ ice cream cones.

A) left, more

B) left, fewer

C) right, more

D) right, fewer

18) Suppose the market supply curve for ice cream cones is upward sloping, and the price of an ice cream cone is constant and remains at $5 a cone.If the government requires firms to pay a $1 tax for each cone they sell, the supply curve of ice cream cones will shift to the _____ and the firms will produce _____ ice cream cones.

A) left, more

B) left, fewer

C) right, more

D) right, fewer

19) Suppose the market supply curve for ice cream cones is upward sloping, and the price of an ice cream cone is constant and remains at $5 a cone. Assume that stores that sell ice cream cones also sell cups of gelato.Suppose the price of a cup of gelato decreases.The supply curve of ice cream cones will shift to the _____ and the firms will produce _____ ice cream cones.

A) left, more

B) left, fewer

C) right, more

D) right, fewer

20) When a firm decides whether or not to produce one more unit of a good, the price it charges for the product is its _______ and the price read off the supply curve at that unit of output represents its __________.

A) benefit, cost of production

B) cost of production, benefit

C) cost of production, consumer surplus

D) consumer surplus, producer surplus