WorksheetsCAFC CHP 2 UNIT 3 Supply
Total questions: 42
Worksheet time: 21mins
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
When supply curve moves to right, it means
supply increases and more quantity is supplied at a given price
supply decreases and less quantity is supplied at a given price
supply remains constant at a given price
none of the above
Elasticity of supply is measured by dividing the percentage change in quantity supplied of a good by ————————
Percentage change in income
Percentage change in quantity demanded of goods
Percentage change in price
Percentage change in taste and preference
Elasticity of supply is greater than one when
Proportionate change in quantity supplied is more than the proportionate change in price.
Proportionate change in price is greater than the proportionate change in quantity supplied.
change in price and quantity supplied are equal
None of the above
The supply function is given as Q = -100 + 10P. Find the elasticity using point method, when price is Rs. 15.
4
-3
-5
3
The supply curve shifts to the right because of ———————
improved technology
increased price of factors of production
increased excise duty
all of the above
Which of the following statements is correct?
When the price falls the quantity demanded falls
Seasonal changes do not affect the supply of a commodity
Taxes and subsidies do not influence the supply of the commodity
With lower cost, it is profitable to supply more of the commodity.
If the demand is more than supply, then the pressure on price will be
Upward
Downward
Constant
None of the above
The supply curve for highly perishable commodities during very short period is generally —
Elastic
Inelastic
Perfectly elastic
Perfectly inelastic
Supply is a ———— concept.
Stock
Flow and stock
Flow
None of the above
Data on production of vegetables for the past two years showed that, despite stable prices, there is a substantial decline in output of cabbage leading to lower supply into the market. Which of the following can possibly be the reason?
An increase in the price of cauliflower which is equally preferred by consumers
Announcement of a subsidy by government on vegetable production
More farmers producing cabbage and the increasing competition among them
A substantial decrease in the price of capsicum
Which of the following alternatives would be true if the event presented in the following diagram occurs?
A fall in wage costs of the firm along with a fall in consumer incomes
A shortage of raw materials and consequent increase in raw material price
An increase in subsidy by the government and a reduction in taxes
Decrease in the market price of the commodity in question
If a short run supply curve is plotted for the following table which presents price and quantity of fighter aircrafts, what will be its shape?
Horizontal straight line parallel to the quantity axis
Steeply rising with elasticity less than one
Vertical straight line parallel to Y axis
A perfectly elastic supply curve
If there is decrease in quantity supplied of a commodity, there will be-
Upward movement on same supply curve
Rightward shift in supply curve
Downward movement on same supply curve
Leftward shift in supply curve
Relationship between slope of supply curve and elasticity of supply can be defined as
Product of slope of supply curve and ratio of quantity supply to price
Elasticity of supply is equal to the slope of supply curve.
Product of reciprocal of supply curve and ratio of price to quantity supplied
Elasticity of supply is equal to reciprocal of slope of supply curve.
A new technique of production reduces the marginal cost of producing paper. How will this affect the supply curve of writing material like notebook, register & notepad etc.?
Upward movement on same supply curve
Downward movement on same supply curve
Leftward shift in supply curve
Rightward shift in supply curve
Supply and stock are __________________
same things
different
having no comparison
Both (B) and (C)
Elasticity of demand and supply are _______________ concepts.
Relative
Absolute
Both (A) and (B)
Neither (A) and (B)
Yesterday, seller A supplied 400 units of a good X at Rs. 10 per unit. Today, seller A supplies the same quantity of units at Rs. 5 per unit. Based on this evidence, seller A has experienced a (an)
Decrease in supply
Increase in supply
Increase in the quantity supplied
Decrease in the quantity supplied.
Suppose we are drawing a supply curve of a farmer which of the following will not be held constant?
Price of Inputs
Weather Conditions
Technology
The price of the Commodity under consideration
Behavior of Supply depends upon:
Phenomenon Considered
Degree of possible adjustment in supply
Time Period under Consideration
All the above
If the supply of mangoes decreases, other things remaining the same, the equilibrium price and the equilibrium quantity _____
Increases; decreases
Decreases; increases
Decreases; decreases
Increases; increases
The supply function is given as Q = -50 + 15p. Find the elasticity using point method, when price is Rs. 20.
1.2
0.83
0.86
None of the above
When price of a good rises from Rs. 20 to Rs. 30 the producer supplies 20% more, the price elasticity of supply is:
0.5
0.4
1
None of the above
The supply curve shows:
The minimum quantity that supplier is willing to supply at each price
The minimum price which will induce suppliers to offer the various quantities for sale
The maximum price which will induce suppliers to offer the various quantities for sale
Both a & c
The flatter the curve, supply elasticity is:
Less
More
zero
1
Commodities which requires specialized resources for production may have:
Less elastic supply
More elastic supply
Unitary elastic supply
Infinite elasticity
The market demand curve is: Qd = 10-2p and the market supply curve is: Qs = -2 + 10p. The market will be in equilibrium if:
P = 1 and Q = 12
P = 5 and Q = 8
P = 1 and Q = 8
None of the above
Producer surplus is represented by the area:
Above the supply curve and below the demand curve
Below the supply curve and above the demand curve
Above the supply curve and below the price line
Below the supply curve and above the price line
In case there are fewer barriers of entry into the market, elasticity of supply will be:
Low
High
Zero
None of the above
Commodities which can be easily and inexpensively stored without losing value may have
Inelastic supply
Perfectly inelastic supply
Elastic supply
Any of the above
Slope of supply curve is 0.6, calculate elasticity of supply when initial price is Rs. 30 per unit and initial quantity is 100 units
0.5
5.5
-0.5
-0.18
Supply will be _______ if firms are not working to full capacity
Inelastic
Perfectly inelastic
Elastic
Any of the above
