#1
Which of the following best defines the law of supply?
As prices rise, quantity supplied rises.
ExplanationPrice and quantity supplied have a positive correlation.
#2
What does the supply curve represent?
The relationship between price and quantity supplied.
ExplanationIllustrates how quantity supplied changes with price.
#3
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.
ExplanationGovernment support to stimulate production.
#4
Which of the following statements best describes a perfectly elastic supply curve?
It is vertical.
ExplanationQuantity supplied remains constant regardless of price changes.
#5
What is the concept of equilibrium quantity?
The quantity of a good or service demanded and supplied at the equilibrium price.
ExplanationAmount of goods or services supplied and demanded at equilibrium.
#6
Which factor does NOT influence supply?
Number of buyers
ExplanationNumber of buyers affects demand, not supply.
#7
What is the concept of elasticity of supply?
It measures the responsiveness of quantity supplied to a change in price.
ExplanationReflects how supply reacts to price changes.
#8
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.
ExplanationAdding more variable input leads to diminishing additional output.
#9
Which of the following is NOT a determinant of supply elasticity?
Proportion of income spent on the good
ExplanationThis factor affects demand elasticity, not supply.
#10
What is producer surplus?
The difference between the price a producer receives and the minimum price they are willing to accept.
ExplanationRepresents producer's gain from selling at a price above minimum.
#11
Which of the following would cause a shift in the supply curve?
A change in technology.
ExplanationTechnology advancements alter supply independent of price.
#12
What is the long-run supply curve?
A curve that shows the relationship between price and quantity supplied when all inputs are variable.
ExplanationReflects supply changes when all factors can be adjusted.
#13
Which of the following is a determinant of market supply?
Cost of production
ExplanationProduction costs influence overall market supply.
#14
In economics, what does the term 'equilibrium price' refer to?
The price at which the quantity supplied equals the quantity demanded.
ExplanationBalance point where supply meets demand.
#15
Which of the following is a determinant of supply?
Price of substitutes
ExplanationSubstitute goods' price affects supply.