Understanding the Law of Supply

Which of the following factors does NOT affect the supply of a product?

• Technology advancements

• Consumer preferences

• Cost of production

• Number of suppliers

What does the elasticity of supply measure?

• The responsiveness of quantity supplied to a change in price

• The change in demand when supply increases

• The change in price when supply decreases

• The responsiveness of quantity demanded to a change in price

An increase in the price of raw materials will shift the supply curve in which direction?

• Right, indicating an increase in supply

• Left, indicating a decrease in supply

• Upward, indicating a higher price

• Downward, indicating a lower price

If a technological advancement makes production more efficient, how does this affect the supply curve?

• It shifts to the right, indicating an increase in supply

• It shifts to the left, indicating a decrease in supply

• It remains unchanged but moves upward

• It remains unchanged but moves downward

Which of the following is an example of a supply factor that can cause the supply curve to shift?

• A change in consumer income

• A change in the price of the product

• A change in government policy affecting production

• A change in consumer tastes and preferences

What happens to the elasticity of supply when it is easier for producers to adjust the quantity supplied?

• It becomes perfectly inelastic

• It decreases

• It increases

• It remains unchanged

How does an increase in the number of suppliers affect the market supply curve?

• It shifts to the right, indicating an increase in supply

• It shifts to the left, indicating a decrease in supply

• It becomes more elastic

• It becomes more inelastic

What is the likely effect on the supply curve of a product if there is an expected future increase in the price of the product?

• It shifts to the right now, anticipating higher future sales

• It shifts to the left now, as producers wait to sell at higher prices

• It remains unchanged

• It becomes perfectly elastic

Which of the following would cause a movement along the supply curve rather than a shift?

• A change in the technology used in production

• A change in the price of the product itself

• A change in government regulations

• A change in the cost of raw materials

If the supply of a product becomes more elastic, what does this imply about the product?

• It has become a necessity with no close substitutes

• It has become a luxury with many close substitutes

• Producers can more easily change the quantity supplied in response to price changes

• Producers find it harder to change the quantity supplied in response to price changes