Question 1

With an upward-sloping supply curve,which of the following is true?

Accepted Answer

An upward-sloping supply curve indicates that as the price decreases, the quantity supplied decreases, which is a fundamental principle of supply in economics.

Question 2

Which of the following is most likely to increase the supply of corn?

Accepted Answer

If the price of soybeans drops, farmers who previously grew primarily soybeans may switch to growing corn instead to make up for lost profits. This would increase the supply of corn. The other options (A, B, and C) would have the opposite effect and decrease the supply of corn.

Question 3

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

Accepted Answer

A change in the market price of a good (assuming all other factors remain constant) will cause a movement along the supply curve. As the price of the good increases, suppliers are willing to supply a greater quantity to the market, resulting in an upward movement along the supply curve. Conversely, as the price of the good decreases, suppliers are willing to supply a lower quantity, resulting in a downward movement along the supply curve.

Changes in raw materials costs, labor costs, and the cost of machinery used to make a good will all cause a shift in the supply curve, not a movement along it.

Question 4

The supply curve reflects the:

Accepted Answer

The answer of The supply curve reflects the:
...

Question 5

Tasha decides that when homes in her neighborhood are selling for $150,000 she will not sell her home.When average prices rise to $175,000,she decides that she will put her home on the market.This is an example of:

Accepted Answer

This is an example of a positively-sloped supply curve, as Tasha is willing to supply her home at a higher price (when the market price reaches $175,000) than she would at a lower price (when the market price is $150,000).

Question 6

Supply curves slope upward because:

Accepted Answer

Rising prices provide producers with the incentive to increase the quantity supplied, as they can earn higher profits. This results in a positive relationship between price and quantity supplied, which is represented by an upward-sloping supply curve.

Question 7

When economists say the quantity supplied of a product has decreased,they mean the:

Accepted Answer

The answer of When economists say the quantity supplied of...

Question 8

A supply curve:

Accepted Answer

A supply curve illustrates the positive relationship between price and quantity supplied, meaning that as the price of a good increases, the quantity supplied by producers also increases. This is represented by a upward-sloping curve.

Question 9

A supply schedule shows the relationship between:

Accepted Answer

A supply schedule shows the relationship between quantity supplied and price. It lists the quantity of a good or service that producers are willing and able to supply at different prices. Thus, the correct choice is D.

Question 10

If the United Auto Workers union can obtain a substantial wage increase for auto workers,there will be a(n):

Accepted Answer

A substantial wage increase for auto workers would increase the cost of production for automobile manufacturers, leading to an increase in the price of automobiles. As a result, consumers would demand fewer automobiles at the higher price, leading to a decrease in the quantity supplied. This is represented by a shift to the left of the supply curve.

Question 11

Which of the following corresponds to the definition of the supply curve?

Accepted Answer

The supply curve shows the relationship between prices and the quantity of a good or service that producers are willing to supply. As prices increase, producers are willing to supply more because they can earn higher profits. Therefore, the supply curve is upward sloping, indicating a positive relationship between prices and quantity supplied.

Question 12

When economists say the quantity supplied of a product has increased,they mean the:

Accepted Answer

The answer of When economists say the quantity supplied of...

Question 13

Which of the following will cause a movement upward along a supply curve?

Accepted Answer

An increase in market price of a good, other things being equal, means that suppliers are willing to produce and sell more of the good at every price level. This leads to a movement upward along the supply curve. Increases in raw-material costs, labor costs, and cost of machinery would all cause a shift in the supply curve, rather than a movement along it.

Question 14

Which of the following will not cause a movement along the supply curve?

Accepted Answer

The answer of Which of the following will not cause...

Question 15

The law of supply states that:

Accepted Answer

The law of supply states that as the price of a good increases, the quantity of it offered for sale by suppliers also increases. This means there is a positive relationship between price and quantity supplied. Options A and B are incorrect because they describe the law of demand, where the relationship between price and quantity is negative. Option D is partially correct, but it does not fully describe the law of supply, which only pertains to the quantity offered for sale by suppliers, not the overall amount produced.

Question 16

When economists say the supply of a product has decreased,they mean that:

Accepted Answer

When economists say the supply of a product has decreased, they mean that the supply curve has shifted to the left. This indicates that suppliers are willing to produce and sell a smaller quantity of the product at every given price level. This can happen due to several factors such as an increase in the cost of production, decrease in technology, government regulations, etc.

Question 17

A technological improvement in producing good A would be a shift in the:

Accepted Answer

A technological improvement in producing good A would lead to lower production costs and an increase in supply, shifting the supply curve to the right. This would result in a decrease in the equilibrium price and an increase in the equilibrium quantity.

Question 18

The supply schedule shows the specific quantity of a good that suppliers are willing and able to:

Accepted Answer

The supply schedule specifically shows the quantity of a good that suppliers are willing and able to provide at different prices.

Question 19

In accordance with the law of supply,both individual and market supply curves are drawn:

Accepted Answer

The law of supply states that as the price of a good increases, the quantity supplied by producers also increases. Therefore, both individual and market supply curves are upward-sloping, indicating that as the price of a good increases, producers are willing to supply more of it.

Question 20

How will an increase in lumber prices influence the home construction market?

Accepted Answer

An increase in lumber prices will directly affect the cost of home construction, making it more expensive to build new homes. As a result, home builders may reduce the supply of newly constructed homes to maintain profitability. This will lead to a decrease in the supply of newly constructed homes.

Quiz 3: Part 1: Market Demand and Supply