CAFC CHP 2 UNIT 3 Supply

A vertical supply curve parallel to Y axis implies that the elasticity of supply is:

• Zero

• Infinity

• Equal to one

• Greater than zero but less than infinity

An increase in the supply of a good is caused by:

• Improvements in its production technology

• Fall in the prices of other goods which can be produced using the same inputs

• Fall in the prices of factors of production used in its production

• all of the above

A horizontal supply curve parallel to the quantity axis implies that the elasticity of supply is:

• Zero

• Infinite

• Equal to one

• Greater than zero but less than one

Contraction of supply is the result of:

• Decrease in the number of producers.

• Decrease in the price of the good concerned.

• Increase in the prices of other goods.

• Decrease in the outlay of sellers.

Supply is the

• limited resources that are available with the seller

• cost of producing a good

• entire relationship between the quantity supplied and the price of good

• Willingness to produce a good if the technology to produce it becomes available

In the book market, the supply of books will decrease if any of the following occurs except:

• a decrease in the number of book publishers

• a decrease in the price of the book

• an increase in the future expected price of the book

• an increase in the price of paper used.

If price of computers increases by 10% and supply increases by 25%. The elasticity of supply is

• 2.5

• 0.4

• -2.5

• -4

An increase in the number of sellers of bikes will increase the

• The price of a bike

• Demand for bikes

• The supply of bikes

• Demand for helmets

If the supply of bottled water decreases, other things remaining the same, the equilibrium price ———————— and the equilibrium quantity ——————————

• increases; decreases

• decreases; increases

• decreases; decreases

• increases; increases

In a very short period, the supply

• can be changed

• cannot be changed

• can be increased

• none of the above