Law of Supply Quiz

What does the law of supply state about the relationship between price and supply?

• As the price increases, supply decreases.

• As the price decreases, supply increases.

• As the price increases, supply also increases.

• The price has no effect on supply.

What is likely to happen to supply when the costs of production, such as natural, labor, or capital resources, increase?

• Supply will increase.

• Supply will decrease.

• Supply will remain unchanged.

• Supply will fluctuate unpredictably.

How do subsidies affect the supply of a good or service?

• Subsidies decrease supply by raising the cost of production.

• Subsidies increase supply by lowering the cost of production.

• Subsidies have no effect on the supply.

• Subsidies increase supply by increasing the cost of production.

What happens to supply when worker productivity increases?

• Supply decreases.

• Supply remains the same.

• Supply increases.

• There is no clear relationship between worker productivity and supply.

According to the law of variable proportion, what is the effect of changing a product’s input in the short run?

• It does not change the output.

• It increases the output proportionally.

• It decreases the output.

• It changes the output.

What effect does technological advancement typically have on the supply of a product?

• It decreases supply by making production more complex.

• It increases supply by making production more efficient.

• It has no effect on supply.

• It unpredictably fluctuates the supply.

How does an increase in taxes on production affect the supply curve of a product?

• The supply curve shifts to the right, indicating an increase in supply.

• The supply curve remains unchanged.

• The supply curve shifts to the left, indicating a decrease in supply.

• The effect on the supply curve cannot be determined.

What is the likely effect on supply when there is an expectation of higher prices for goods in the future?

• Supply decreases as producers wait to sell at higher prices.

• Supply increases as producers try to sell more before prices rise.

• Supply remains the same as price expectations have no effect.

• Supply fluctuates unpredictably due to varying producer expectations.

If workers are (a)   , productivity and supply increase.

_____ increases supply as more sellers are willing to produce a product.

• Scarcity
• Monopoly
• Collaboration
• Competition