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Worksheets5.1 What is Supply?
Total questions: 118
Worksheet time: 59mins
Name
Class
Date
1.
What is the concept of supply based on?
a)
Voluntary decisions made by producers
b)
Decisions made by consumers
c)
Government regulations
d)
Random chance
e)
The availability of resources
2.
What types of producers can be involved in supply decisions?
a)
Proprietorships or large corporations
b)
Only large corporations
c)
Only small businesses
d)
Government entities
e)
Non-profit organizations
3.
How might a producer decide to offer a product for sale?
a)
At one price for one quantity and a different price for another quantity
b)
At a single price for all quantities
c)
Based on government-set prices
d)
Based on consumer demand
e)
Based on competitor prices
4.
What is the definition of supply?
a)
The amount of a product offered for sale at all possible prices
b)
The amount of a product available at one fixed price
c)
The total stock of a product available for sale
d)
The total cost of producing a product
e)
The demand for a product in the market
5.
Why do producers offer more products at higher prices?
a)
Because they receive payment for their products
b)
Because they want to sell at a loss
c)
Because they want to attract more consumers
d)
Because government mandates higher prices
e)
Because of increased competition
6.
What is the Law of Supply?
a)
The principle that suppliers offer more for sale at higher prices and less at lower prices
b)
The principle that suppliers must charge the same price for all quantities
c)
The rule that government sets the prices suppliers can charge
d)
The idea that suppliers will sell at the lowest price
e)
The principle that supply is not affected by price
7.
What motivates producers to offer more products at higher prices?
a)
The promise of high prices and profits
b)
The need to reduce inventory
c)
Pressure from consumers for lower prices
d)
Regulations that require higher sales
e)
The goal of increasing market share
8.
What was the motivation behind the company entering the U.S. market in the news story?
a)
The promise of high prices and profits
b)
The desire to reduce operating costs
c)
The need to diversify its product offerings
d)
The pressure of competitors entering the market
e)
The government providing subsidies
9.
What must suppliers decide regarding their products?
a)
How much to offer for sale at various prices
b)
The cost of production
c)
The type of product to offer
d)
The target market for the product
e)
The delivery method
10.
What influences the supplier's decision about how much to offer for sale?
a)
The cost of producing the goods or services
b)
Consumer demand
c)
Competitor prices
d)
Government regulations
e)
Profit margins
11.
How can the concept of supply be illustrated?
a)
In the form of a table or a graph
b)
In a financial report
c)
By listing the product features
d)
Through advertisements
e)
In a consumer survey
12.
What is a supply schedule?
a)
A listing of quantities supplied at all possible prices
b)
A chart showing customer preferences
c)
A report on production costs
d)
A list of competitor prices
e)
A summary of inventory levels
13.
What does Panel A of Figure 5.1 present?
a)
A hypothetical supply schedule for CDs
b)
A demand schedule for CDs
c)
A price comparison chart for CDs
d)
A supply and demand analysis
e)
A profit margin graph for CDs
14.
What does the supply schedule in Panel A show?
a)
The quantities of CDs supplied at various prices
b)
The cost of producing CDs
c)
The number of CDs sold in the market
d)
The customer demand for CDs
e)
The profit from selling CDs
15.
What does "other things being equal" imply in the supply schedule?
a)
That all other factors remain unchanged
b)
That the quantity will increase with demand
c)
That production costs vary with price
d)
That government regulations will not change
e)
That competition is not a factor
16.
How does the supply schedule compare to the demand schedule in Figure 4.1?
a)
The main difference is that the quantity goes up when the price goes up for supply
b)
The quantity decreases as the price goes up for supply
c)
The quantity stays constant regardless of price
d)
The quantity goes up for demand when price increases
e)
The demand schedule shows higher quantities at lower prices
17.
What happens to the quantity of a product in a supply schedule when the price goes up?
a)
The quantity goes up
b)
The quantity stays the same
c)
The quantity goes down
d)
The quantity fluctuates based on demand
e)
The quantity is determined by consumer preferences
18.
How is the supply schedule different from the demand schedule?
a)
The quantity in the supply schedule goes up when the price goes up
b)
The quantity in the demand schedule goes up when the price goes up
c)
The supply schedule shows lower quantities at higher prices
d)
The demand schedule shows higher quantities at higher prices
e)
The supply schedule ignores price changes
19.
How can the data in a supply schedule be illustrated graphically?
a)
As an upward-sloping line
b)
As a downward-sloping line
c)
As a flat, horizontal line
d)
As a jagged curve
e)
As a vertical line
20.
What is the process to draw the individual supply curve?
a)
Transfer each price-quantity observation to the graph and connect the points
b)
Plot only the highest price and quantity
c)
Draw a line connecting the lowest and highest price points
d)
Use only demand data for reference
e)
Connect random data points from the supply schedule
21.
What does the supply curve show?
a)
The various quantities supplied at all possible prices
b)
The total demand for a product at different prices
c)
The total amount of a product available
d)
The average price of a product at all quantities
e)
The cost of production at varying prices
22.
What is the slope of all normal supply curves?
a)
Positive slope going up from lower left to upper right
b)
Negative slope going down from upper left to lower right
c)
No slope, it’s a straight line
d)
A fluctuating curve
e)
A vertical line
23.
What does the positive slope of the supply curve indicate?
a)
If the price goes up, the quantity supplied will go up
b)
If the price goes up, the quantity supplied will go down
c)
If the price goes up, the supply remains constant
d)
If the price goes down, the supply increases
e)
If the price goes up, the supply remains unaffected
24.
What does the supply schedule and curve in Figure 5.1 represent?
a)
The voluntary decisions of a single hypothetical producer of CDs
b)
The government’s decision on price levels
c)
The average demand for CDs in the market
d)
The total inventory available for sale
e)
The average wages of CD producers
25.
How is supply defined beyond just a hypothetical producer of CDs?
a)
Supply is a general concept, like offering labor for a job
b)
Supply is limited to tangible goods only
c)
Supply is restricted to large corporations
d)
Supply involves only raw materials
e)
Supply refers to what is available in a warehouse
26.
What does the supply curve in Figure 5.1 show?
a)
The information for a single firm
b)
The market demand for a product
c)
The prices set by the government
d)
The total quantity available in a market
e)
The production costs of a single firm
27.
What are we more interested in when analyzing the supply curve in many cases?
a)
The market supply curve
b)
The individual firm's supply curve
c)
The total cost curve of production
d)
The demand curve
e)
The equilibrium price curve
28.
What does the market supply curve show?
a)
The quantities offered by all firms at various prices
b)
The quantities demanded at various prices
c)
The total cost of producing goods in the market
d)
The total profit of all firms in the market
e)
The price set by the government for each firm
29.
How is the data for the market supply curve obtained?
a)
By adding the number of products that individual firms would produce
b)
By surveying consumer demand
c)
By calculating the average price across all firms
d)
By averaging the production costs of each firm
e)
By setting a fixed price for all firms
30.
What does point a on the market supply curve represent?
a)
Six CDs—four from the first firm and two from the second firm—at a price of $15
b)
Five CDs—three from the first firm and two from the second firm—at $15
c)
Four CDs from the first firm at a price of $15
d)
Six CDs from both firms combined at a price of $20
e)
Three CDs from each firm at $15
31.
What does point b on the market supply curve represent?
a)
Nine CDs offered for sale at a price of $20
b)
Six CDs offered for sale at $20
c)
Eight CDs offered for sale at $15
d)
Seven CDs offered for sale at $20
e)
Nine CDs offered for sale at $15
32.
How do you plot the data for the market supply curve?
a)
By adding the quantities from each firm and then plotting them on a graph
b)
By choosing the highest price and quantity from each firm
c)
By plotting the prices for each firm without adding quantities
d)
By averaging the quantities produced by each firm
e)
By plotting the individual supply curves on the same graph
33.
What does the market supply curve represent for multiple firms?
a)
The combined quantities offered for sale at different prices
b)
The average price across all firms
c)
The total demand for the product at each price
d)
The total production costs of all firms
e)
The maximum price each firm can charge
34.
How is the market supply curve different from the supply curve for a single firm?
a)
The market supply curve shows the combined quantities offered by all firms
b)
The supply curve for a single firm is less detailed
c)
The market supply curve only shows prices
d)
The market supply curve ignores the prices firms are charging
e)
The market supply curve is vertical
35.
How are the points on the market supply curve determined?
a)
By adding the quantities from all firms at each price level
b)
By averaging the production quantities of firms
c)
By selecting random quantities from firms
d)
By plotting the demand quantities at each price level
e)
By calculating the supply for one firm only
36.
What does the quantity supplied refer to?
a)
The amount producers bring to market at a given price
b)
The total demand for a product
c)
The total amount of a product available
d)
The price producers charge for a product
e)
The cost of producing a product
37.
What is a change in quantity supplied?
a)
A change in the amount offered for sale in response to a price change
b)
A change in the cost of production
c)
A change in consumer demand for a product
d)
A shift in the supply curve
e)
A change in the market price
38.
How many CDs are supplied when the price is $15 according to Figure 5.1?
a)
Four CDs
b)
Six CDs
c)
Seven CDs
d)
Three CDs
e)
Five CDs
39.
What happens to the quantity supplied when the price increases from $15 to $20?
a)
Six CDs are supplied
b)
Four CDs are supplied
c)
Seven CDs are supplied
d)
Three CDs are supplied
e)
No CDs are supplied
40.
How many units are supplied when the price rises to $25?
a)
Seven units
b)
Four units
c)
Six units
d)
Eight units
e)
Nine units
41.
What does a change in quantity supplied represent on the supply curve?
a)
A movement along the supply curve
b)
A shift of the entire supply curve
c)
A change in consumer preferences
d)
A change in production costs
e)
A shift in demand
42.
Can the change in quantity supplied be an increase or a decrease?
a)
Yes, depending on whether more or less of the product is offered
b)
No, it can only increase
c)
No, it can only decrease
d)
Yes, but only based on production costs
e)
Yes, but only based on demand
43.
What does the movement from point a to point b in Figure 5.1 represent?
a)
An increase in quantity supplied
b)
A decrease in quantity supplied
c)
A shift in the supply curve
d)
A shift in demand
e)
A decrease in demand
44.
What would the movement from point b to point a on the supply curve show?
a)
A decrease in quantity supplied
b)
An increase in quantity supplied
c)
A shift of the supply curve
d)
A change in demand
e)
A price change without a supply change
45.
Does the concept of a change in quantity supplied apply to both individual and market supply curves?
a)
Yes, it applies to both
b)
No, it only applies to individual supply curves
c)
No, it only applies to market supply curves
d)
Yes, but only for demand curves
e)
No, it only applies to price changes
46.
How do producers typically react to changing prices in a market economy?
a)
By adjusting production up or down
b)
By increasing production regardless of price
c)
By keeping production constant
d)
By reducing production without regard to price
e)
By changing prices based on demand
47.
What might a producer do if the price of oil falls?
a)
Offer less for sale or leave the market
b)
Offer more for sale
c)
Keep the same amount offered for sale
d)
Increase production to meet demand
e)
Reduce prices to increase demand
48.
What happens if the price of oil rises?
a)
The producer may offer more output for sale
b)
The producer may offer less output for sale
c)
The producer may stop production altogether
d)
The producer may reduce the price
e)
The producer may leave the market
49.
What causes a change in supply?
a)
A situation where suppliers offer different amounts of products for sale at all prices
b)
A change in the price of a product
c)
A change in consumer demand
d)
A shift in the quantity supplied
e)
A change in government regulations
50.
How is a change in supply different from a change in quantity supplied?
a)
A change in supply occurs even if the price remains the same
b)
A change in quantity supplied happens when the price changes
c)
A change in supply happens only with a price increase
d)
A change in quantity supplied is always a decrease
e)
A change in supply always involves a change in demand
51.
What does the supply schedule in Figure 5.3 show?
a)
Producers are willing to offer more CDs at every price than before
b)
Producers are offering fewer CDs at each price
c)
The price of CDs is increasing
d)
The demand for CDs is increasing
e)
The price of CDs is decreasing
52.
How many CDs are offered at a price of $15 in the new supply schedule?
a)
13 units
b)
6 units
c)
10 units
d)
4 units
e)
8 units
53.
How many CDs are offered at a price of $25 in the new supply schedule?
a)
18 units
b)
11 units
c)
7 units
d)
10 units
e)
15 units
54.
What happens when both old and new quantities are plotted on a graph?
a)
The supply curve shifts to the right, showing an increase in supply
b)
The supply curve shifts to the left, showing a decrease in supply
c)
The supply curve remains unchanged
d)
The supply curve becomes flat
e)
The supply curve becomes vertical
55.
What happens when there is a decrease in supply?
a)
Less is offered for sale at all possible prices, shifting the supply curve to the left
b)
More is offered for sale at all prices, shifting the supply curve to the right
c)
The quantity offered remains the same
d)
The price decreases while the quantity remains unchanged
e)
The supply curve becomes flat
56.
What can cause changes in supply?
a)
Several factors, including a change in the number of sellers
b)
Only a change in price
c)
Only a change in demand
d)
Only a government regulation
e)
Only a change in consumer preferences
57.
What does a change in the number of sellers affect?
a)
Only the market supply curve
b)
Only the individual supply curve
c)
Both the individual and market supply curves
d)
Neither supply curve
e)
Only the price of a product
58.
What happens to the supply curve when supply increases?
a)
The supply curve shifts to the right
b)
The supply curve shifts to the left
c)
The supply curve stays the same
d)
The supply curve becomes vertical
e)
The supply curve becomes horizontal
59.
What can cause a change in supply?
a)
A change in the cost of productive inputs such as land, labor, and capital
b)
A change in consumer preferences
c)
A change in demand
d)
A change in the price of the product
e)
A change in government policies
60.
What happens when the cost of inputs decreases?
a)
Supply might increase because producers are willing to produce more
b)
Supply decreases because of higher input costs
c)
Demand decreases as a result of lower input costs
d)
The supply curve remains unchanged
e)
The supply curve shifts to the left
61.
What happens if the price of inputs drops?
a)
Producers are willing to produce more, shifting the supply curve to the right
b)
Producers will produce less, shifting the supply curve to the left
c)
The quantity supplied remains unchanged
d)
The price of the product increases
e)
The demand curve shifts
62.
What happens when the cost of inputs increases?
a)
Supply decreases, shifting the supply curve to the left
b)
Supply increases, shifting the supply curve to the right
c)
There is no effect on the supply curve
d)
The price of the product increases
e)
The supply curve remains unchanged
63.
What happens when labor or other costs rise?
a)
Producers offer fewer products for sale, and the supply curve shifts to the left
b)
Producers offer more products for sale, and the supply curve shifts to the right
c)
The supply curve becomes flat
d)
The price of the product increases
e)
The quantity supplied increases
64.
What does productivity refer to in the context of supply?
a)
More output produced using the same amount of input
b)
More input used to produce the same output
c)
A decrease in the number of units produced
d)
A change in the price of production
e)
A change in the demand for goods
65.
What happens when management trains or motivates its workers?
a)
Productivity usually goes up
b)
Productivity usually goes down
c)
Production costs increase
d)
The supply curve shifts to the left
e)
Fewer products are produced
66.
What can increase productivity besides management training?
a)
Workers deciding to work harder or more efficiently
b)
Workers deciding to reduce their working hours
c)
Workers refusing to work
d)
Management reducing training costs
e)
A decrease in production resources
67.
What happens when productivity increases?
a)
More output is produced at every price, shifting the supply curve to the right
b)
Less output is produced, shifting the supply curve to the left
c)
The supply curve remains unchanged
d)
The price of the product decreases
e)
The demand curve shifts
68.
What happens if workers are unmotivated, untrained, or unhappy?
a)
Productivity could decrease, shifting the supply curve to the left
b)
Productivity could increase, shifting the supply curve to the right
c)
The supply curve becomes vertical
d)
More goods are produced at every price
e)
The supply curve becomes horizontal
69.
How does new technology typically affect the supply curve?
a)
It shifts the supply curve to the right
b)
It shifts the supply curve to the left
c)
It has no effect on the supply curve
d)
It causes a decrease in productivity
e)
It shifts the demand curve
70.
What can the introduction of a new machine or process affect?
a)
It can lower the cost of production or increase productivity
b)
It can increase the cost of production
c)
It can decrease the number of workers
d)
It can shift the demand curve
e)
It can reduce output
71.
How have improvements in fuel efficiency of jet aircraft engines affected supply?
a)
They have lowered the cost of providing passenger air service
b)
They have increased the cost of providing passenger air service
c)
They have decreased the number of flights
d)
They have made air travel less affordable
e)
They have decreased productivity
72.
What happens when production costs go down due to technology?
a)
The producer is usually able to produce more goods at all prices
b)
The producer produces fewer goods at higher prices
c)
The producer stops production
d)
The demand curve shifts to the left
e)
The supply curve becomes vertical
73.
Do new technologies always work as expected?
a)
No, sometimes equipment can break down or parts may be hard to obtain
b)
Yes, they always work as planned
c)
No, they always lead to higher costs
d)
Yes, they always increase the number of units produced
e)
No, they always reduce efficiency
74.
What happens if new technology doesn't work as expected?
a)
The supply curve can shift to the left
b)
The supply curve can shift to the right
c)
The supply curve remains unchanged
d)
The price of the product increases
e)
The number of products decreases
75.
Are new technologies generally expected to be beneficial?
a)
Yes, producers are usually interested in them
b)
No, producers avoid new technologies
c)
Yes, but only when they are expensive
d)
No, they always decrease production efficiency
e)
Yes, but only if they increase costs
76.
How do firms view taxes in relation to production?
a)
As a cost of production, just like raw materials and labor
b)
As an extra source of revenue
c)
As a way to increase supply
d)
As an optional business expense
e)
As a way to reduce production
77.
What happens when a company pays taxes on inventory or pays fees for a license?
a)
The cost of production goes up, shifting the supply curve to the left
b)
The cost of production decreases, shifting the supply curve to the right
c)
There is no effect on production costs
d)
The supply curve becomes horizontal
e)
The supply curve becomes vertical
78.
What happens if taxes go down?
a)
Production costs go down, causing the supply curve to shift to the right
b)
Production costs go up, causing the supply curve to shift to the left
c)
The price of products decreases
d)
The supply curve becomes steeper
e)
The supply curve becomes flatter
79.
What is a subsidy?
a)
A government payment to encourage or protect economic activity
b)
A tax imposed to reduce supply
c)
A type of loan given to producers
d)
A penalty for failing to meet production goals
e)
A regulation limiting production
80.
How do subsidies affect production?
a)
They lower the cost of production, encouraging producers to stay and enter the market
b)
They increase the cost of production, discouraging producers
c)
They have no effect on production
d)
They make production more expensive
e)
They limit the supply of goods in the market
81.
What happens when subsidies are repealed?
a)
Production costs go up, producers leave the market, and the supply curve shifts to the left
b)
Production costs go down, producers enter the market, and the supply curve shifts to the right
c)
The supply curve becomes horizontal
d)
The number of producers remains the same
e)
The price of products increases
82.
Which industries historically received subsidies?
a)
Milk, cotton, corn, wheat, and soybean industries
b)
Electronics, technology, fashion, and entertainment industries
c)
Automobile, energy, steel, and textile industries
d)
Financial, real estate, and tourism industries
e)
Aerospace, pharmaceuticals, and telecommunications industries
83.
How did subsidies affect farmers in the past?
a)
They kept farmers in business and attracted more farmers, shifting the supply curve to the right
b)
They led farmers to leave the market and decrease production
c)
They increased farming costs, reducing the number of farmers
d)
They had no impact on farmers or production
e)
They made farming less profitable and less competitive
84.
How can expectations about future prices affect supply?
a)
Producers may plan to produce more if they expect higher future prices, shifting the supply curve to the right
b)
Producers may produce less if they expect higher future prices
c)
Producers may stop production if they expect prices to remain constant
d)
Expectations have no effect on supply
e)
Producers will decrease production regardless of price expectations
85.
What happens if producers expect lower future prices?
a)
They may try to produce something else or stop producing altogether, shifting the supply curve to the left
b)
They will increase production to take advantage of lower prices
c)
They will enter new markets and increase output
d)
They will reduce prices immediately
e)
They will keep production constant despite price expectations
86.
How can expectations about future prices affect a firm's input costs?
a)
Expectations can influence the price a firm plans to pay for inputs used in production
b)
Expectations have no impact on input costs
c)
Expectations only affect the supply of finished products
d)
Expectations only affect labor costs
e)
Expectations only affect future production quantities
87.
How do events in the news affect expectations?
a)
They can cause expectations to change frequently
b)
They make expectations more predictable
c)
They have no effect on expectations
d)
They make expectations more stable
e)
They reduce uncertainty in market behavior
88.
What happens when the government establishes new regulations?
a)
The cost of production can change, causing a change in supply
b)
The demand for products increases
c)
The supply curve shifts to the right
d)
Prices of goods remain unaffected
e)
The government reduces production costs
89.
What is an example of a regulation that increases the cost of production?
a)
Requiring new auto safety features such as airbags or emission controls
b)
Reducing the cost of labor
c)
Subsidizing production costs
d)
Relaxing environmental controls
e)
Decreasing safety standards
90.
How do producers adjust to higher production costs due to new regulations?
a)
They produce fewer cars at every possible price
b)
They increase production to meet demand
c)
They lower the price of cars
d)
They reduce their labor costs
e)
They switch to producing a different product
91.
What is the effect of tighter government regulations on the supply curve?
a)
The supply curve shifts to the left
b)
The supply curve shifts to the right
c)
There is no shift in the supply curve
d)
The demand curve shifts to the left
e)
The price of goods increases
92.
What happens when government regulations are relaxed?
a)
The supply curve shifts to the right due to lower production costs
b)
The supply curve shifts to the left due to higher production costs
c)
The demand curve shifts to the right
d)
Prices decrease due to lower supply
e)
The supply curve remains unchanged
93.
What effect does a change in the number of suppliers have on the market supply curve?
a)
It can cause the market supply curve to shift to the right or left
b)
It always shifts the supply curve to the left
c)
It only affects individual firm supply curves
d)
It always shifts the demand curve
e)
It has no effect on the supply curve
94.
What happens when more firms enter an industry?
a)
The supply curve shifts to the right because more products are offered
b)
The supply curve shifts to the left because fewer products are offered
c)
The price of products increases
d)
The supply curve remains unchanged
e)
The market becomes more competitive
95.
What happens when some suppliers leave the market?
a)
The supply curve shifts to the left because fewer products are offered
b)
The supply curve shifts to the right because more products are offered
c)
The supply curve remains unchanged
d)
The demand curve shifts to the right
e)
The price of products decreases
96.
How are changes in the number of sellers observed in real life?
a)
Sellers are entering and leaving markets all the time
b)
Sellers never leave markets
c)
Sellers only enter markets during economic recessions
d)
Sellers only leave markets when profits decrease
e)
Sellers enter markets when demand is low
97.
How has the Internet impacted the number of sellers in the market?
a)
It has attracted new businesses and made it easier for anyone to open an online store
b)
It has caused fewer people to start businesses
c)
It has made it harder to enter new markets
d)
It has only attracted large firms to sell products
e)
It has decreased the number of online stores
98.
What is supply elasticity a measure of?
a)
The way in which the quantity supplied responds to a change in price
b)
The way demand changes in response to price
c)
The amount of goods produced at a fixed price
d)
The relationship between price and demand
e)
The quantity of a product demanded at various prices
99.
What happens when an increase in price leads to a proportionally larger increase in output?
a)
Supply is elastic
b)
Supply is inelastic
c)
Supply is unit elastic
d)
Demand is elastic
e)
Price is fixed
100.
What does it mean if an increase in price causes a proportionally smaller change in output?
a)
Supply is inelastic
b)
Supply is elastic
c)
Supply is unit elastic
d)
Demand is elastic
e)
Supply is constant
101.
What happens if an increase in price causes a proportional change in output?
a)
Supply is unit elastic
b)
Supply is inelastic
c)
Supply is elastic
d)
Demand is unit elastic
e)
Price remains unchanged
102.
What is the difference between supply and demand elasticities?
a)
The concept depends on whether quantities are being bought or brought to market
b)
The concept depends on the elasticity of price
c)
There is no difference between them
d)
They both deal with consumer demand only
e)
Supply elasticity only applies to producers
103.
How is elasticity defined in both demand and supply?
a)
Elasticity is simply a measure of the way quantity adjusts to a change in price
b)
Elasticity measures price changes
c)
Elasticity is the change in supply without price adjustments
d)
Elasticity refers to how much quantity increases with no change in price
e)
Elasticity is a measure of demand only
104.
What does Figure 5.4 illustrate?
a)
Three examples of supply elasticity
b)
Three examples of price elasticity
c)
Three examples of demand elasticity
d)
Three price points for a product
e)
Three examples of consumer preference changes
105.
What is shown in Panel A of Figure 5.4?
a)
An elastic supply curve where price causes a proportionally larger change in quantity supplied
b)
An inelastic supply curve where price has no effect
c)
A unit elastic supply curve
d)
A decrease in supply due to a price increase
e)
A horizontal supply curve
106.
How does the price change in Panel A of Figure 5.4?
a)
The price doubles from $1 to $2
b)
The price decreases from $2 to $1
c)
The price triples from $1 to $3
d)
The price remains constant at $1
e)
The price increases by 50%
107.
What is shown in Panel B of Figure 5.4?
a)
An inelastic supply curve where the price increase causes a proportionally smaller change in quantity supplied
b)
An elastic supply curve where price causes a large increase in quantity
c)
A unit elastic supply curve
d)
A perfect competition scenario
e)
A demand curve inelasticity
108.
What does the elasticity of a producer's supply curve depend on?
a)
The nature of its production
b)
The price of raw materials
c)
The size of the firm
d)
Consumer preferences
e)
The level of competition
109.
If a firm can adjust to new prices quickly, what is the likely elasticity of its supply?
a)
Elastic
b)
Inelastic
c)
Unit elastic
d)
Perfectly elastic
e)
None of the above
110.
What happens if the nature of production means adjustments take longer?
a)
Supply is likely to be inelastic
b)
Supply is likely to be elastic
c)
Supply will be unit elastic
d)
Supply will be perfectly inelastic
e)
Supply will be perfectly elastic
111.
Why is the supply curve for nuclear power likely to be inelastic in the short run?
a)
Because of the huge amount of capital and technology needed
b)
Because of high consumer demand
c)
Due to low government regulation
d)
Because production is fast and flexible
e)
Because the firm has many substitutes
112.
What factor makes it difficult to increase output for nuclear power?
a)
The huge amount of capital and technology required
b)
The lack of demand for electricity
c)
The low cost of labor
d)
The low price of nuclear power
e)
The high supply of substitutes
113.
Why is the supply curve for many toys, candy, and other products likely to be elastic?
a)
Because they can be made quickly without huge amounts of capital and skilled labor
b)
Because they are regulated by the government
c)
Due to limited consumer demand
d)
Because they have many substitutes
e)
Because of high production costs
114.
What happens if consumers are willing to pay twice the price for products like toys and candy?
a)
Most producers can increase production quickly
b)
Producers will not increase production
c)
Production will decrease
d)
Prices will stay the same
e)
Producers will focus on different products
115.
What does the number of substitutes have to do with supply elasticity?
a)
It has no bearing on supply elasticity
b)
It determines whether supply is elastic or inelastic
c)
It makes supply more inelastic
d)
It makes supply more elastic
e)
It is the main determinant of supply elasticity
116.
Which factors are important in determining supply elasticity?
a)
Production considerations
b)
The number of substitutes
c)
Consumer preferences
d)
Income level
e)
Demand for the product
117.
If a firm can react quickly to a changing price, what is the likely elasticity of its supply?
a)
Elastic
b)
Inelastic
c)
Unit elastic
d)
Perfectly inelastic
e)
None of the above
118.
What happens if a firm takes longer to react to a change in prices?
a)
Supply is likely to be inelastic
b)
Supply is likely to be elastic
c)
Supply will be unit elastic
d)
Supply will be perfectly elastic
e)
Supply will remain unchanged
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