Principles of Economic Supply Quiz

Test your understanding with 15 questions on law of supply, elasticity, determinants, and more. Prepare for your microeconomics exam!

Practice Learn Test

Which of the following best defines the law of supply?

As prices rise, quantity supplied rises.

As prices rise, quantity demanded rises.

As prices fall, quantity demanded rises.

As prices fall, quantity supplied rises.

What does the supply curve represent?

The relationship between price and quantity supplied.

The relationship between price and quantity demanded.

The relationship between income and consumption.

The relationship between savings and investment.

What is the concept of a subsidy in economics?

A payment made by the government to producers to encourage production of a certain good or service.

A payment made by consumers to producers to ensure a steady supply of a certain good or service.

A tax levied on consumers to discourage the consumption of a certain good or service.

A tax levied on producers to discourage the production of a certain good or service.

Which of the following statements best describes a perfectly elastic supply curve?

It is horizontal.

It is vertical.

It slopes upward to the right.

It slopes downward to the right.

What is the concept of equilibrium quantity?

The quantity of a good or service demanded at the equilibrium price.

The quantity of a good or service supplied at the equilibrium price.

The quantity of a good or service demanded and supplied at the equilibrium price.

The quantity of a good or service demanded and supplied when there is no equilibrium.

Which factor does NOT influence supply?

Technology

Price of inputs

Number of buyers

Government regulations

What is the concept of elasticity of supply?

It measures the responsiveness of quantity supplied to a change in price.

It measures the responsiveness of quantity demanded to a change in price.

It measures the responsiveness of quantity supplied to a change in income.

It measures the responsiveness of quantity demanded to a change in income.

What is the law of diminishing marginal returns?

As more units of a variable input are added to a fixed input, the marginal product of the variable input eventually decreases.

As more units of a variable input are added to a fixed input, the total product of the variable input eventually decreases.

As more units of a variable input are added to a fixed input, the marginal cost of production eventually decreases.

As more units of a variable input are added to a fixed input, the total cost of production eventually decreases.

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

Time period under consideration

Availability of substitutes

Proportion of income spent on the good

Ease of factor substitution

#10

What is producer surplus?

The difference between the price a producer receives and the minimum price they are willing to accept.

The difference between the quantity supplied and the quantity demanded at the market equilibrium price.

The difference between the price consumers are willing to pay and the price they actually pay.

The difference between the total revenue received by a producer and the total cost of production.

#11

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

A change in price of the good.

A change in consumer preferences.

A change in technology.

A change in the price of substitutes.

#12

What is the long-run supply curve?

A curve that shows the relationship between price and quantity supplied when all inputs are variable.

A curve that shows the relationship between price and quantity supplied when all inputs are fixed.

A curve that shows the relationship between price and quantity supplied in the short run.

A curve that shows the relationship between price and quantity supplied in the long term, considering technological change.

#13

Which of the following is a determinant of market supply?

Cost of production

Tastes and preferences of consumers

Number of sellers

Income of buyers

#14

In economics, what does the term 'equilibrium price' refer to?

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

The price at which the quantity supplied exceeds the quantity demanded.

The price at which the quantity demanded exceeds the quantity supplied.

The price at which the quantity demanded and the quantity supplied are both zero.

#15

Which of the following is a determinant of supply?

Price of the good

Price of substitutes