ECON AP Gov: Intro to Supply

What does the Law of Supply state about the relationship between price and quantity supplied?

• It states the relationship can vary.

• It states there is a direct relationship.

• It states there is an inverse relationship.

• It states there is no relationship.

What happens to the supply of milk if the price of dairy cows increases?

• Supply increases.

• Supply decreases.

• Supply remains unchanged.

• Supply fluctuates unpredictably.

What effect does a government subsidy have on the supply curve?

• Shifts it to the right.

• No effect on the supply curve.

• Shifts it to the left.

• Makes it steeper.

What is a surplus in the market?

• When the market stops functioning.

• When supply and demand are equal.

• When supply exceeds demand.

• When demand exceeds supply.

What typically happens in a market when there is a shortage?

• Consumers stop buying.

• Producers stop producing.

• Prices tend to rise.

• Prices tend to fall.