ABBE1033 Lecture 3 The Mechanics of Markets: Supply Theory

What is the law of supply?

• As the price of a good increases, the quantity supplied decreases.
• As the price of a good increases, the quantity supplied increases.
• As the price of a good decreases, the quantity supplied increases.
• The quantity supplied is independent of the price.

What happens to the supply curve when there is a change in quantity supplied?

• The supply curve shifts to the right.
• The supply curve shifts to the left.
• There is movement along the supply curve.
• The supply curve becomes vertical.

What is the result of a change in supply?

• A shift of the supply curve.
• Movement along the supply curve.
• A change in the quantity demanded.
• A change in consumer preferences.

If the price of inputs decreases, what is the likely effect on the supply curve?

• The supply curve shifts to the right.
• The supply curve shifts to the left.
• There is movement along the supply curve.
• The supply curve becomes steeper.

What does a movement along the supply curve indicate?

• A change in supply.
• A change in quantity supplied.
• A shift in demand.
• A change in consumer preferences.

What is the effect of an increase in the number of sellers in the market?

• The supply curve shifts to the left.
• The supply curve shifts to the right.
• There is movement along the supply curve.
• The supply curve becomes vertical.

How does a tax on production affect the supply curve?

• The supply curve shifts to the right.
• The supply curve shifts to the left.
• There is movement along the supply curve.
• The supply curve becomes horizontal.

What is the effect of an expected future price increase on current supply?

• Increase in current supply
• Decrease in current supply
• No change in current supply
• Increase in current demand

Which of the following would cause a change in supply rather than a change in quantity supplied?

• A change in the price of the good
• A change in production technology
• A movement along the supply curve
• None of the above

How would an improvement in production technology likely affect the supply curve?

• Shift the curve to the left
• Shift the curve to the right
• Move along the existing curve
• Have no effect on the curve