Supply and Price Elasticity Quiz

Which of the following best describes the term "supply"?

• The total quantity demanded at a given price.

• The total quantity producers are willing and able to sell at a given price.

• The amount consumers are willing and able to buy at different prices.

• The relationship between price and demand in a market.

Which of the following factors is most likely to cause a shift in the supply curve?

• A change in the price of the product.

• A change in consumer preferences.

• A change in the cost of raw materials.

• A change in the income levels of consumers.

If the government imposes a subsidy on the production of a good, what will happen to the supply curve?

• It will shift to the left.

• It will remain unchanged.

• It will shift to the right.

• It will become vertical.

What happens to supply when a firm's production technology improves?

• Supply decreases because costs increase.

• Supply increases because costs decrease.

• Supply remains unchanged as technology has no effect on supply.

• Supply decreases because firms produce less.

Which of the following is NOT a determinant of supply?

• Production costs.

• Price of substitutes.

• Number of sellers in the market.

• Weather conditions (for agricultural products).

What does the Price Elasticity of Supply (PES) measure?

• How much demand changes when income changes.

• The relationship between supply and consumer preferences.

• How responsive quantity supplied is to a change in price.

• How much demand changes when the price of a product changes.

If the PES of a product is greater than 1, supply is:

• Perfectly inelastic.

• Unit elastic.

• Price inelastic.

• Price elastic.

Which of the following factors is likely to make the supply of a product more price elastic?

• Short production time.

• Inflexible production processes.

• Limited availability of resources.

• Longer time period for production adjustments.

If a good has a PES of 0, what does this mean?

• Supply is unit elastic.

• Supply is perfectly inelastic.

• Supply is price elastic.

• Supply is perfectly elastic.

Why might the supply of agricultural products be relatively inelastic in the short term?

• Producers can easily adjust the quantity supplied.

• Agricultural production is unaffected by external conditions.

• Production is limited by the growing season and natural factors.

• Demand for agricultural products fluctuates unpredictably.