Deck 4: Supply

Question 1

A table that indicates the quantity of a good or service that would be supplied in a given period at various prices is called a:

A) demand schedule.
B) supply schedule.
C) production possibilities frontier.
D) markup.

Answer 1

B

Question 2

What is a supply schedule?

A) a table indicating the quantities that are supplied at various prices
B) a graph showing the quantities that are sold at various prices
C) a table describing what people are willing to buy at various prices
D) a graph showing the quantities that are bought at various prices

Answer 2

A

Question 3

Use the table The Supply Schedule for Beaded Necklaces. What is the market supply at a price of $20?
​

A) zero
B) two
C) three
D) six

Answer 3

D

Question 4

Use the table The Supply Schedule for Beaded Necklaces. What is the market supply at a price of $10?
​

A) one
B) two
C) 10
D) nine

Question 5

Use the table The Supply Schedule for Beaded Necklaces. What is the lowest price that would create a market supply of six necklaces?
​

A) $5
B) $10
C) $15
D) $20

Question 6

Use the table The Supply Schedule for Beaded Necklaces. What is the lowest price that would create a market supply of at least seven necklaces?
​

A) $15
B) $20
C) $25
D) $30

Question 7

What is a supply curve?

A) a curve that illustrates the relationship between the price of a good and the quantity that people are willing to buy
B) a curve that illustrates the relationship between the price of a good or service and the quantity that firms are willing to sell
C) a table that shows the quantities that sellers are willing to sell at various prices
D) a table that shows the quantities that people are willing to buy at various prices

Question 8

A curve that illustrates the relationship between the price of a good or service and the quantity that firms are willing to supply is called the:

A) demand curve.
B) production possibilities frontier.
C) supply curve.
D) average cost curve.

Question 9

The _____ cost is the additional cost of supplying one more unit of a good or service.

A) total
B) average
C) fixed
D) marginal

Question 10

What does the word marginal mean in the term marginal cost?

A) one more
B) average
C) best
D) lowest

Question 11

What is the marginal cost of a good?

A) the cost of producing a typical unit
B) the cost of producing one more unit
C) the variable costs of producing a good
D) the per-unit costs of producing a good

Question 12

Suppliers are willing to supply a higher quantity only at higher prices because they:

A) are greedy.
B) will charge whatever buyers are willing to pay.
C) have to take a market price as given.
D) have higher opportunity costs as more is supplied.

Question 13

Which of the following best describes why suppliers of handmade bead necklaces are willing to supply higher quantities of necklaces only when the price of necklaces increases?

A) Necklace producers must give up increasingly valuable periods of their day to produce them.
B) The cost of a typical necklace is always increasing.
C) The total cost of production increases as more necklaces are produced.
D) There is no scarcity in the resources that are available to suppliers of necklaces.

Question 14

Use the table The Supply Schedule for Beaded Necklaces. What can be inferred about Oliver when the price of necklaces is $20?
​

A) His opportunity cost of producing a fourth necklace is higher than $20.
B) His total costs of production are higher than $20.
C) His cost of producing a typical necklace when he produced four necklaces is higher than $20.
D) He has a net gain of producing a fourth necklace when the price is $20.

Question 15

Use the table The Supply Schedule for Beaded Necklaces. What can be inferred about Abby when the price of necklaces is $20?
​

A) Her opportunity cost of producing a necklace is higher than $20.
B) Her total cost of producing a typical necklace when she produced four necklaces is higher than $20.
C) She has a net gain of producing necklaces when the price less than $20.
D) She values the opportunity cost of her time to produce one necklace at $20.

Question 16

The law of supply states that:

A) ceteris paribus, sellers respond to higher prices by lowering production.
B) all else equal, the price of a good and the quantity supplied of a good are positively related.
C) supply creates its own demand.
D) buyer will purchase a good at whatever price the seller sets.

Question 17

The law of supply implies that supply curves are _____, and the law of demand implies that demand curves are ____.

A) vertical; horizontal
B) upward sloping; downward sloping
C) horizontal; vertical
D) downward sloping; upward sloping

Question 18

The law of supply implies that supply curves are always:

A) downward sloping.
B) horizontal.
C) vertical.
D) upward sloping.

Question 19

When the price of a good increases but no other factors change, this is shown on a supply curve as a:

A) shift to the left of the supply curve.
B) shift to the right of the supply curve.
C) movement to the left along the supply curve.
D) movement to the right along the supply curve.

Question 20

What causes a movement to the right along a supply curve for good Z?

A) a decrease in the price of good Z
B) an increase in the price of good Z
C) an increase in the quantity supplied for good Z at every price
D) a decrease in the quantity supplied for good Z at every price

Question 21

Ezra produces cotton candy that he sells at carnivals. Recently, a change occurred that makes him willing to sell less candy at each price. What happens to Ezra's supply curve?

A) There is a movement to the right along his supply curve.
B) There is a movement to the left along his supply curve.
C) There is a shift to the left of his supply curve.
D) There is a shift to the right of his supply curve.

Question 22

How do you represent a seller's willingness to sell less at each price on a supply curve?

A) a movement to the left along a supply curve
B) a movement to the right along a supply curve
C) a rightward shift of the supply curve
D) a leftward shift of the supply curve

Question 23

Use the figure The Supply Curve. What is represented by the movement from point X to point Y?
​
Figure: The Supply Curve

A) a decrease in quantity supplied
B) an increase in quantity supplied
C) an increase in supply
D) a decrease in supply

Question 24

Use the figure The Supply Curve. What is represented by the movement from point L to point M?
​
Figure: The Supply Curve

A) a decrease in quantity supplied
B) an increase in quantity supplied
C) an increase in supply
D) a decrease in supply

Question 25

Use the figure The Supply Curve. What caused the change from point L to point M in this graph?
​
Figure: The Supply Curve

A) The price of this good increased.
B) The price of this good decreased.
C) The cost of resources used in producing this good decreased.
D) The number of sellers of this good increased.

Question 26

Use the figure The Supply Curve. What caused the movement from point X to point Y?
​
Figure: The Supply Curve

A) The price for a complement in production of this good increased.
B) The price of a substitute in production of this good increased.
C) The price of this good increased.
D) The price of this good decreased.

Question 27

Use the figure The Supply Curve II. What is represented by the change shown in this graph?
​
Figure: The Supply Curve II

A) a decrease in quantity supplied
B) an increase in quantity supplied
C) an increase in supply
D) a decrease in supply

Question 28

Which of the following does NOT cause the supply curve to increase?

A) an decrease in the number of buyers
B) a decrease in the cost of resources used to produce a good
C) an increase in the price of a good that is a complement in production
D) a decrease in the price of a good that is a substitute in production

Question 29

Which of the following does NOT cause the supply curve to shift to the left?

A) an decrease in price
B) an increase in production costs
C) a decrease in the number of firms
D) the lower price expectations of sellers

Question 30

Which of the following does NOT cause the supply curve to increase?

A) an increase in the number of sellers
B) cheaper resources used to produce the good
C) higher consumer incomes
D) a decrease in the number of sellers

Question 31

Which of the following would cause a decrease in the supply of rides from ride sharing services?

A) lower wages for drivers
B) better technology for coordinating driver routes
C) more regulation of ride sharing services
D) lower prices for food delivery services, a substitute in production of ride sharing

Question 32

Which of the following would cause an increase in the supply of hot-air balloon rides?

A) an increase in the demand for hot-air balloon rides
B) an increase in the cost of fabric used to make balloons
C) a decrease in the wages of hot-air balloon pilots
D) an increase in the price of hot-air balloon package delivery services, a substitute in production for hot-air balloon rides

Question 33

Use the figure The Supply Curve. Which of the following changes would NOT cause the change shown in this graph?
​
Figure: The Supply Curve II

A) lower input costs
B) improved technology
C) a higher price for this good
D) lower regulations for this industry

Question 34

Use the figure The Supply of Radishes. Which of the following changes would NOT cause the movement shown in this graph?
​
Figure: The Supply of Radishes

A) higher wages for radish pickers
B) increased regulation of radish farms
C) improved technology for radish harvesting
D) an infestation of radish pests

Question 35

Use the figure The Supply of Radishes. Which of the following changes would cause the movement shown in this graph?
​
Figure: The Supply of Radishes

A) higher wages for radish pickers
B) reduced regulation of radish farms
C) improved technology for radish harvesting
D) an elimination of radish pests

Question 36

Which of the following would shift the supply of pumpkin pie to the right?

A) an increase in the price of pumpkin pie
B) a decrease in the price of pumpkins
C) an increase in the wages paid to labor on pumpkin farms
D) an increase in the price of sugar, a key ingredient in pumpkin pie

Question 37

Which of the following would decrease the supply of leather boots?

A) better technology in boot production methods
B) a decrease in the price of leather boots
C) an increase in the price of leather
D) a decrease in the price of sewing machines used to sew boots together

Question 38

Economists who study the market for rubber automobile tires have concluded that the supply curve has recently shifted to the right. What might have caused this?

A) a decrease in the price of rubber
B) a hurricane that destroyed many rubber tree plantations in South America
C) an increase in the price of automobile tires
D) the expectations of producers of automobile tires that future tire prices will rise

Question 39

Industry analysts for the pumpkin spice muffin market have concluded that the supply curve has recently shifted to the left. What might have caused this?

A) Producers of pumpkin spice muffins are expecting future muffin prices to fall.
B) The number of pumpkin spice muffin producers has increased.
C) The technology used in baking the muffins has improved.
D) The price of pumpkin spice flavoring has increased.

Question 40

Use the figure The Supply of Candles. Which of the following changes would cause the change in supply shown in this graph?
​
Figure: The Supply of Candles

A) a worker shortage in the candle-making industry
B) stricter safety regulation in the candle-making industry
C) higher prices for wax, which is used to produce candles
D) expectations of a lower price for candles in the future

Question 41

The temporary storage of goods by firms is called:

A) housing.
B) revenue.
C) profit.
D) inventory.

Question 42

A firm that expects lower prices in the future will keep:

A) less in inventory and supply more today.
B) more in inventory and supply less today.
C) less in inventory and supply less today.
D) more in inventory and supply more today.

Question 43

Janet has an inventory of 100 houseplants. She expects that she can get a higher price for the houseplants she sells in one month. How does this affect her supply of houseplants today and in one month?

A) Her supply today decreases; her supply next month increases.
B) Her supply today increases; her supply next month decreases.
C) Her supply today is unaffected; her supply next month increases.
D) Her supply today increases; her supply next month increases.

Question 44

When a firm holds goods in temporary storage until the time is ripe for selling the goods, a firm is:

A) increasing the supply of goods today.
B) reducing its profit.
C) manipulating the market.
D) holding inventory.

Question 45

A drought in California, a region known for its almond trees, would have which of the following effects on the supply of almond beverages?

A) a shift to the right of the supply curve
B) a shift to the left of the supply curve
C) a movement to the right along the supply curve
D) a movement to the along the supply curve

Question 46

The reason that unexpected bad weather can affect the supply curve is that it changes:

A) the cost of producing a good.
B) buyers' incomes.
C) buyers' willingness to buy a good.
D) the laws about selling the good.

Question 47

A tsunami destroys many power plants on the coast of a country. What change can be expected in the supply of electricity in that country?

A) a movement to the right along a supply curve
B) a movement to the left along a supply curve
C) a shift to the right of the supply curve
D) a shift to the left of the supply curve

Question 48

Forest fires in the Pacific Northwest of the United States have destroyed thousands of fir trees that are used in making lumber. What change can be expected in the supply of lumber in that region of the country?

A) a movement to the right along a supply curve
B) a shift to the left of the supply curve
C) a shift to the right of the supply curve
D) a movement to the left along a supply curve

Question 49

Suppose that ideal weather conditions, including optimal rainfall, have created an enormous soybean crop in the United States. How would this affect the supply of soybeans in the United States?

A) There would be a downward movement to the left along a supply curve.
B) There would be a shift to the left of the supply curve.
C) There would be a shift to the right of the supply curve.
D) There would be an upward movement to the right along a supply curve.

Question 50

The inputs used to create two goods are the same. Therefore, these two goods are:

A) substitutes in consumption.
B) complements.
C) substitutes in production.
D) storable.

Question 51

Almonds can be used to produce almond beverages or marzipan. What happens if the price of almond beverages increases?

A) The quantity supplied of almond beverages increases, and the supply of marzipan decreases.
B) The quantity supplied of almond beverages increases, and the supply of marzipan is unaffected.
C) The quantity supplied of almond beverages decreases, and the supply of marzipan decreases.
D) The quantity supplied of almond beverages decreases, and the quantity supplied of marzipan increases.

Question 52

Good A and good B are complements in production. What happens to the supply of good A and the supply of good B if the price of good B increases?

A) The quantity supplied of good B increases, and the supply of good A decreases.
B) The quantity supplied of good B decreases, and the supply of good A decreases.
C) The quantity supplied of good B increases, and the supply of good A increases.
D) The quantity supplied of good B increases, and the quantity supplied of good A decreases.

Question 53

Soybeans can be used to produce meatless sausages or biodiesel fuel. If the price of biodiesel fuel begins to increase, what would we expect to see?

A) an increase in the quantity of biodiesel fuel supplied and a rightward shift in the supply of meatless sausages
B) a decrease in the quantity of biodiesel fuel supplied and a leftward shift in the supply of meatless sausages
C) an increase in the quantity of biodiesel fuel supplied and a leftward shift in the supply of meatless sausages
D) a rightward shift in the supply of biodiesel fuel and a leftward shift in the supply of meatless sausages

Question 54

When sawmills cut logs to produce lumber, they also use the sawdust and scrap wood to produce sheets of particle board. If the price of lumber begins to fall, how would this affect the supply of lumber and particle board?

A) The quantity of lumber supplied decreases, and the particle board supply curve shifts to the right.
B) The quantity of lumber supplied increases, and the particle board supply curve shifts to the right.
C) The lumber supply curve shifts to the left, and the particle board supply curve shifts to the left.
D) The quantity of lumber supplied decreases, and the particle board supply curve shifts to the left.

Question 55

Use the figure The Supply Curve II. The supply curve of a good has changed as shown in this graph in response to an increase in the price of another good. These two goods must be:
​
Figure: The Supply Curve II

A) complements in production.
B) complements in consumption.
C) substitutes in production.
D) substitutes in consumption.

Question 56

Good A and good B are complements in production. If the price of good A increases, then the _____ of good A increases, and the _____ of good B increases.

A) quantity supplied; supply
B) quantity supplied; quantity supplied
C) supply; supply
D) supply; quantity supplied

Question 57

Good X and good Y are substitutes in production. If the price of good X increases, then the _____ of good X increases, and the _____ of good Y decreases.

A) quantity supplied; quantity supplied
B) supply; supply
C) supply; quantity supplied
D) quantity supplied; supply

Question 58

Good R and good S are substitutes in production. If the price of good S increases, then the:

A) supply of good R decreases, and the quantity supplied of good S increases.
B) supply of good R increases, and the supply of good S decreases.
C) quantity supplied of good R increases, and the supply of good S decreases.
D) quantity supplied of both goods decreases.

Question 59

Good L and good M are complements in production. If the price of good L decreases, then the quantity supplied of good L:

A) decreases and the quantity supplied of good M decreases.
B) decreases and the supply of good M decreases.
C) increases and the supply of good M increases.
D) increases and the quantity of good M decreases.

Question 60

When the price of honey decreased, the supply of almonds decreased. What is the relationship between honey and almonds?

A) Honey is an input into the production of almonds.
B) Honey and almonds are substitutes in production.
C) Honey and almonds are complements in production.
D) Honey and almonds are unrelated goods.

Question 61

An increase in the production of one good has led to an increase the supply of another good. What are these two goods?

A) substitutes in production
B) substitutes in consumption
C) complements in production
D) complements in consumption

Question 62

When the production of beef increased, the supply of leather increased. What are these two goods?

A) substitutes in production
B) substitutes in consumption
C) complements in production
D) complements in consumption

Question 63

Maria is a baker. The price of kolaches increased, and as a result, Maria's supply of croissants decreased. What are these two goods?

A) substitutes in consumption
B) complements in production
C) complements in consumption
D) substitutes in production

Question 64

Ricotta and mozzarella are kinds of cheese. When the price of mozzarella increased, the supply of ricotta increased. What are these two goods?

A) complements in production
B) complements in consumption
C) substitutes in production
D) substitutes in consumption

Question 65

An increase in the quantity supplied of a good leads to _____ for a complement in production of that good.

A) an increase in supply
B) a decrease in quantity supplied
C) a decrease in supply
D) no change in the supply

Question 66

Good X and good Y are substitutes in production. An increase in the price of good X will cause the:

A) supply of good X to increase and the supply of good Y to decrease.
B) supply of good X to increase and the supply of good Y to increase.
C) quantity supplied of good X to increase and the supply of good Y to increase.
D) quantity supplied of good X to increase and the supply of good Y to decrease.

Question 67

When the number of firms in an industry increases, what change will occur?

A) The quantity supplied in that industry decreases.
B) The supply curve shifts to the right.
C) The supply curve shifts to the left.
D) There is a movement to the right along the supply curve.

Question 68

The supply curve does NOT shift to the right when the:

A) number of firms increases.
B) price of a storable good is expected to decrease in the future.
C) price of a complement of production increases.
D) cost of the factors of production increase.

Question 69

Use the figure A Change in the Supply Curve. What caused the change shown in this graph?
​
Figure: A Change in the Supply Curve

A) The price of a substitute in production increased.
B) The price of an input used to produce this good increased.
C) Sellers expect to get a lower price in the future.
D) Sellers are getting a lower price for a complement in production.

Question 70

Use the figure A Change in the Supply Curve. What could have caused the change shown here?
​
Figure: A Change in the Supply Curve

A) an increase in the number of buyers
B) a decrease in the cost of producing this good
C) fewer firms in this market
D) an increase in consumer income

Question 71

Use the figure A Change in the Supply Curve. What change has occurred in this graph?
​
Figure: A Change in the Supply Curve

A) an increase in supply
B) an increase in quantity supplied
C) a decrease in supply
D) a decrease in quantity supplied

Question 72

Use the figure A Change in the Supply Curve II. What caused the change shown in this graph?
​
Figure: A Change in the Supply Curve II

A) Consumer incomes increased.
B) The prices of the resources used to produce this good have gotten cheaper.
C) There are more firms in this market.
D) The price of a substitute in production to this good increased.

Question 73

Use the figure A Change in the Supply Curve II. What could have caused the change shown here?
​
Figure: A Change in the Supply Curve II

A) The price of a complement in production of this good decreased.
B) The number of buyers increased.
C) The cost of resources decreased.
D) Consumer incomes increased, and this is a normal good.

Question 74

Use the figure A Change in the Supply Curve II. What change has occurred in this graph?
​
Figure: A Change in the Supply Curve II

A) an increase in supply
B) an increase in quantity supplied
C) a decrease in supply
D) a decrease in quantity supplied

Question 75

What is producer surplus?

A) another name for profit
B) another name for marginal benefit
C) the difference between the price of a good and its marginal cost
D) the difference between the price of a good and the cost of producing a typical unit

Question 76

The difference between the price received from selling a product and the marginal cost of producing that product is called:

A) profit.
B) producer surplus.
C) deadweight loss.
D) consumer surplus.

Question 77

When a good is sold, producer surplus is the difference between _____ received and _____ incurred.

A) price; average total cost
B) price; total cost
C) marginal benefit; marginal cost
D) price; marginal cost

Question 78

The supply of cheese sticks is upward sloping. If the price of cheese sticks increases, all else equal, we would see:

A) an increase in quantity supplied and a decrease in producer surplus.
B) a decrease in quantity supplied and a decrease in producer surplus.
C) an increase in quantity supplied and an increase in producer surplus.
D) a shift to the right of the supply curve and an increase in producer surplus.

Question 79

The supply of cheese sticks is upward sloping. If the price of cheese sticks decreases, all else equal, we would see:

A) an increase in quantity supplied and a decrease in producer surplus.
B) a decrease in quantity supplied and a decrease in producer surplus.
C) an increase in quantity supplied and an increase in producer surplus.
D) a shift to the left of the supply curve and a decrease in producer surplus.

Question 80

The money left over from customer payments after it has subtracted all costs is the firm's:

A) marginal cost.
B) producer surplus.
C) profit.
D) revenue.