Econ Quiz CH 3 Part 2

According to the law of supply, what happens to the quantity of a good supplied as the price increases?

• The quantity supplied decreases.

• The quantity supplied remains unchanged.

• The quantity supplied increases.

• The quantity supplied is unrelated to the price.

What is the relationship between price and supply as stated by the law of supply?

• As price falls, supply quantity increases.

• As price increases, supply quantity falls.

• As price increases, supply quantity increases.

• There is no relationship between price and supply.

What term do economists use to describe the amount of a good that is offered for sale at a specific price?

• Demand quantity

• Market equilibrium

• Quantity supplied

• Price elasticity

What encourages firms to produce more goods?

• Decreased competition

• The promise of increased revenues when prices are high

• Lower production costs

• Government subsidies

What effect do rising prices have on the quantity supplied of a good?

• They decrease the quantity supplied.

• They have no effect on the quantity supplied.

• They increase the quantity supplied by drawing new firms into the market.

• They increase the quantity supplied by reducing consumer demand.

What is a market supply schedule?

• A) A list of suppliers in the market.

• B) A chart that lists how much of a good all suppliers will offer at different prices.

• C) A schedule for when the market is open.

• D) A record of daily sales in the market.

What does the elasticity of supply measure?

• The way quantity demanded reacts to a change in income.

• The way quantity supplied reacts to a change in price.

• The way price reacts to a change in quantity supplied.

• The way quantity supplied reacts to a change in technology.

When supply is not very responsive to changes in price, it is considered:

• Elastic.

• Inelastic.

• Unitary elastic.

• Perfectly elastic.

If a supply is very sensitive to changes in price, it is described as:

• Inelastic.

• Unitary elastic.

• Perfectly inelastic.

• Elastic.

What is the elasticity of supply in the short run?

• Elastic

• Inelastic

• Constant

• Infinite