Supply in Economics: Definition, Factors, and Curve

Question 1

Which of the following factors is likely to **cause** a decrease in the quantity of a good supplied at a given price?

Accepted Answer

A decrease in producer expectations about future prices

Answer

A decrease in input costs

Answer

An improvement in technology

Answer

An increase in government subsidies

Question 2

The supply curve represents the relationship between:

Accepted Answer

Price and quantity supplied

Answer

Price and demand

Answer

Quantity supplied and demand

Answer

Supply and technology

Question 3

Which scenario would most likely lead to a rightward shift in the supply curve?

Accepted Answer

A decrease in production costs

Answer

An increase in demand

Answer

A government tax

Answer

A natural disaster

Question 4

If the price of a good increases, what is the expected response in quantity supplied?

Accepted Answer

It will increase

Answer

It will remain the same

Answer

It will decrease

Answer

It is impossible to say

Question 5

Which assumption underlines the law of supply?

Accepted Answer

Other factors that influence supply remain constant

Answer

Demand is perfectly inelastic

Answer

The price of the good is rising

Answer

The market is in equilibrium

Question 6

Which of the following is NOT a determinant of supply?

Accepted Answer

Consumer expectations

Answer

Number of suppliers

Answer

Technology

Answer

Input costs

Question 7

The upward slope of the supply curve indicates that:

Accepted Answer

Producers are willing to offer more at higher prices

Answer

Producers face constant marginal costs

Answer

Supply exceeds demand at all prices

Answer

Lower prices stimulate more demand

Question 8

Which event most likely represents a supply shock?

Accepted Answer

Natural disaster

Answer

Increased advertising

Answer

Change in consumer preferences

Answer

Government subsidy

Question 9

The elasticity of supply measures the:

Accepted Answer

Responsiveness of quantity supplied to price changes

Answer

Slope of the demand curve

Answer

Impact of taxes on consumer surplus

Question 10

A perfectly elastic supply curve means that

Accepted Answer

Producers can supply any quantity at the given price without affecting the market price.

Answer

Producers have a fixed capacity and cannot increase output.

Answer

The quantity supplied is not affected by price changes within a certain range.

Answer

Producers are unwilling to supply anything below a certain price.

Question 11

The concept of supply is essential for understanding

Accepted Answer

How producers respond to market conditions and the dynamics of markets.

Answer

Consumer preferences and demand.

Answer

Government interventions and regulation only.

Answer

International trade and globalization.

Question 12

A decrease in the number of suppliers will

Accepted Answer

Shift the supply curve to the left, leading to a higher equilibrium price.

Answer

Increase equilibrium price, even if the supply curve does not shift.

Answer

Increase elasticity of supply, making the curve flatter.

Answer

Shift the supply curve to the right, assuming new suppliers enter the market.

Question 13

Which of the following is NOT a way to increase supply?

Accepted Answer

Introduce price controls that set a maximum price below the equilibrium level.

Answer

Invest in new technology that reduces production costs.

Answer

Provide subsidies to producers, making production more profitable.

Question 14

The most precise definition of supply is:

Accepted Answer

The quantity of a good or service that producers are willing and able to offer for sale at a specific price, in a given time period, and under prevailing market conditions.

Answer

The quantity of a good or service that consumers are willing and able to buy at a given price.

Question 15

What does the supply curve show?

Accepted Answer

The graphical representation of the relationship between the price of a good or service and the quantity supplied by producers.

Answer

The relationship between the price of a good or service and the quantity demanded by consumers.

Answer

The relationship between the quantity of a good or service supplied and the quantity demanded.

Question 16

What is the effect of a decrease in production costs on the supply of a good or service?

Accepted Answer

A decrease in production costs typically leads to an increase in the quantity supplied by producers, assuming other factors remain constant.

Answer

No change in supply, as the quantity supplied is determined by factors other than production costs.

Answer

A decrease in supply, as producers may be less willing to produce at lower prices.

Question 17

What is the effect of an increase in the price of a good or service on the quantity supplied?

Accepted Answer

An increase in supply

Answer

A decrease in supply

Answer

Unpredictable change in supply

Answer

No change in supply

Question 18

What is the term for the point on the supply curve where the quantity supplied equals the quantity demanded?

Accepted Answer

Equilibrium

Answer

Surplus

Answer

Shortage

Question 19

What is the effect of a negative shift in the supply curve?

Accepted Answer

A decrease in supply

Answer

No change in supply

Answer

A increase in supply

Answer

Unpredictable change in supply

Question 20

Which of the following accurately defines supply in economics?

Accepted Answer

The quantity of goods and services producers are willing and able to offer for sale at a given price

Answer

The relationship between the price of a good and the quantity demanded by consumers

Answer

The total quantity of goods and services consumers are willing to buy at a given price

Question 21

Which of the following is NOT a determinant of supply?

Accepted Answer

Consumer demand

Answer

Number of producers in the market

Answer

Price of inputs

Answer

Technology

Question 22

The supply curve shows the relationship between:

Accepted Answer

Price and quantity supplied

Answer

Quantity supplied and consumer demand

Answer

Price and quantity demanded

Answer

Price and market equilibrium

Question 23

A shift in the supply curve to the left indicates:

Accepted Answer

Decrease in supply

Answer

Decrease in demand

Answer

Increase in demand

Answer

Increase in supply

Question 24

The elasticity of supply measures how much the quantity supplied of a good changes in response to a change in its price. Which of the following describes this responsiveness?

Accepted Answer

Responsiveness of quantity supplied to changes in price

Answer

Proportion of income spent on a good

Answer

Sensitivity of demand to changes in income

Question 25

In which market would the supply be most elastic (meaning the quantity supplied is very responsive to price changes)?

Accepted Answer

A market with many producers and easy entry and exit for new firms.

Answer

A market with only a few large producers.

Answer

A market where producers have high fixed costs of production.

Question 26

What impact does a government subsidy given to producers have on the supply of a good?

Accepted Answer

Increases supply

Answer

Decreases demand

Answer

Decreases supply

Answer

Increases demand

Question 27

In a perfectly competitive market, how much control does an individual producer have over the price of their product?

Accepted Answer

No control over price

Answer

Complete control over price

Answer

Partial control over price

Answer

Monopoly power

Question 28

What is the best definition of supply in economics?

Accepted Answer

The quantity of goods and services producers are willing and able to offer at different prices.

Answer

The equilibrium price at which the quantity supplied equals the quantity demanded.

Answer

The demand for goods and services at different prices.

Question 29

Which of the following factors DOES NOT directly influence the supply of a good?

Accepted Answer

Consumer preferences

Answer

Technological advancements

Answer

Production costs

Answer

Number of suppliers

Question 30

What is the relationship between the supply curve and the price of a good?

Accepted Answer

Directly proportional

Answer

Quadratic

Answer

Unrelated

Answer

Inversely proportional

Question 31

What is the likely effect of a technological advancement on the supply of a good?

Accepted Answer

Increases supply

Answer

Decreases supply

Answer

No effect on supply

Answer

Unpredictable effect on supply

Question 32

Which of the following events is considered a supply shock, meaning it causes a sudden and significant change in supply?

Accepted Answer

Natural disaster

Answer

Change in consumer preferences

Answer

Increase in production costs

Answer

Government policy change

Question 33

The law of supply states that:

Accepted Answer

As the price of a good increases, the quantity supplied of that good also increases.

Answer

The quantity supplied of a good remains constant regardless of the price.

Answer

As the price of a good increases, the quantity supplied decreases.

Question 34

Which of the following is a factor that would shift the supply curve to the right?

Accepted Answer

Decrease in production costs

Answer

Decrease in the number of suppliers

Answer

Natural disaster

Answer

Increase in consumer demand

Question 35

What is the difference between a change in quantity supplied and a shift in the supply curve?

Accepted Answer

A change in quantity supplied is a movement along the supply curve, while a shift in the supply curve is a change in the entire curve

Answer

A change in quantity supplied is a temporary change, while a shift in the supply curve is a permanent change

Question 36

Which of the following is the definition of supply?

Accepted Answer

The quantity of goods and services that producers are willing and able to offer at different prices.

Answer

The relationship between the price of a good or service and the quantity supplied.

Answer

The quantity of goods and services that consumers are willing and able to purchase at different prices.

Question 37

Which of the following factors is NOT a determinant of supply?

Accepted Answer

Tastes and preferences of consumers

Answer

Cost of production

Answer

Number of producers

Answer

Technology

Question 38

Which of the following would cause a shift in the supply curve to the right?

Accepted Answer

A decrease in the cost of production

Answer

An increase in the price of the good or service

Answer

A decrease in the number of producers

Answer

An increase in consumer demand

Question 39

What is the effect of a subsidy on supply?

Accepted Answer

It shifts the supply curve to the right

Answer

It has no effect on the supply curve

Answer

It shifts the supply curve to the left

Question 40

What is the relationship between the supply curve and the law of supply?

Accepted Answer

The supply curve is a graphical representation of the law of supply

Answer

The law of supply is only applicable to certain types of goods and services

Answer

The law of supply is a mathematical equation for the supply curve

Question 41

Which of the following is a real-world example of a supply shock?

Accepted Answer

A natural disaster

Answer

A change in consumer preferences

Answer

A technological advancement

Answer

A government subsidy

Question 42

What is the role of supply in determining equilibrium price and quantity?

Accepted Answer

Supply interacts with demand to determine the point where the quantity supplied equals the quantity demanded

Answer

Supply is the only factor that determines equilibrium price

Question 43

Which of the following would cause a movement along the supply curve?

Accepted Answer

A change in the price of the good or service

Answer

A change in technology

Answer

A change in consumer demand

Answer

A change in the number of producers

Question 44

How is a price ceiling likely to affect the supply of a good or service?

Accepted Answer

It can lead to a shortage

Answer

It always decreases the supply

Answer

It always increases the supply

Answer

It has no effect on the supply

Question 45

Which of the following is NOT a determinant of supply?

Accepted Answer

Consumer preferences

Answer

Number of producers

Answer

Technology

Answer

Cost of production

Question 46

The supply curve slopes upward because:

Accepted Answer

As the price of a good or service increases, producers are willing to supply more of it.

Answer

As the price of a good or service decreases, producers are willing to supply less of it.

Answer

The quantity supplied is always equal to the quantity demanded.

Question 47

A technological advancement that reduces the cost of production will:

Accepted Answer

Shift the supply curve to the right.

Answer

Cause a movement along the supply curve.

Answer

Shift the supply curve to the left.

Answer

Not affect the supply curve.

Question 48

The elasticity of supply measures:

Accepted Answer

The responsiveness of quantity supplied to changes in price.

Answer

The responsiveness of quantity demanded to changes in price.

Answer

The responsiveness of supply to changes in consumer preferences.

Question 49

A perfectly elastic supply curve indicates that:

Accepted Answer

Producers can supply any quantity at the given price.

Answer

The quantity supplied is always equal to the quantity demanded.

Answer

Producers are unwilling to supply any quantity at the given price.

Question 50

An increase in the price of a substitute good will lead to:

Accepted Answer

An increase in the demand for the original good.

Answer

A decrease in the supply of the original good.

Answer

A decrease in the demand for the original good.

Answer

No change in the demand for the original good.