Supply and Economics Quiz

What does the law of supply state about the quantity of a good supplied during a given time period?

• It is inversely related to its price.

• It is usually directly related to its price.

• It remains constant regardless of price.

• It decreases as price increases.

What is a supply curve?

• A line showing the demand for a good.

• A curve showing the quantities of a good supplied at various prices.

• A graph of consumer preferences.

• A chart of production costs.

What does elasticity of supply measure?

• The change in demand due to price changes.

• The responsiveness of quantity supplied to a price change.

• The total output of a firm.

• The fixed costs of production.

What results in a movement along a supply curve?

• A change in consumer preferences.

• A change in the price of the good.

• A change in production technology.

• A change in government policy.

What causes a shift of a supply curve?

• A change in the price of the good.

• A change in one of the determinants of supply other than the price.

• A change in consumer income.

• A change in the quantity demanded.

What is the definition of short run in economics?

• A period during which all resources can be varied.

• A period during which at least one of a firm's resources is fixed.

• A period of constant production costs.

• A period of increasing returns.

What is the total product?

• The total cost of production.

• The total output of the firm per period.

• The total revenue from sales.

• The total profit of the firm.

What does the law of diminishing returns state?

• Total output increases indefinitely with more resources.

• Marginal product eventually declines as more of a variable resource is added.

• Fixed costs decrease with increased production.

• Total cost remains constant regardless of output.

What is a fixed cost?

• A cost that changes as output changes.

• A cost that is independent of the firm's output.

• A cost that varies with the price of raw materials.

• A cost that decreases with increased production.

What is a variable cost?

• A cost that remains constant regardless of output.

• A cost that changes as output changes.

• A cost that is fixed over time.

• A cost that is independent of production levels.