Supply and Market Dynamics Quiz

Which of the following best describes the Law of Supply?

• As price decreases, producers offer more.

• As price increases, producers offer less.

• As price increases, producers offer more.

• Price has no effect on supply.

Quantity supplied refers to:

• The total amount of a good demanded.

• How much a producer is willing and able to sell at a specific price.

• The overall market supply.

• Consumer demand.

How do rising prices typically affect the number of suppliers in a market?

• They decrease the number of suppliers.

• They have no effect on the number of suppliers.

• They attract new firms, increasing the number of suppliers.

• They cause existing firms to merge.

A supply schedule shows the relationship between:

• Demand and price.

• Price and quantity demanded.

• Price and quantity supplied.

• Consumer and producer surplus.

What is the key difference between a supply schedule and a market supply schedule?

• One is for consumers, the other for producers.

• One shows demand, the other shows supply.

• One is for a single firm, the other for all firms in the market.

• They are the same thing.

Elasticity of supply measures:

• Consumer sensitivity to price changes.

• Producer sensitivity to price changes.

• The equilibrium price.

• The amount of government regulation.

In the short run, the elasticity of supply is generally:

• More elastic.

• More inelastic.

• Perfectly elastic.

• Perfectly inelastic.

Equilibrium in a market occurs when:

• Supply exceeds demand.

• Demand exceeds supply.

• Quantity demanded equals quantity supplied.

• Prices are high.

Disequilibrium in a market can lead to:

• Equilibrium.

• Shortage or surplus.

• Price stability.

• Perfect competition.

A shortage occurs when:

• Quantity supplied exceeds quantity demanded.

• Quantity demanded exceeds quantity supplied.

• Prices are too high.

• There is no demand.