Supply Review

What To Know…

• What is supply?• Law of supply• How the supply curve slopesThe six factors that affect supply: input costs,

labor productivity, technology, government action, producer expectations, new businesses – be able to identify examples

Inelastic & elastic supply – be able to identify examples

Yes, you will have to read & interpret a supply curve (graph)

STUDY and you will do well!

5.1 Question 1

The desire and ability to produce and sell a product is

a. demandb. productionc. profitd. supply

5.1 Question 1

The desire and ability to produce and sell a product is

a. demandb. productionc. profitd. supply

5.1 Question 2

The law of supply states thata. when prices go up, quantity supplied goes

down; when prices go down, quantity supplied goes up

b. when prices go down, quantity supplied goes down; when prices go up, quantity supplied goes up

c. when prices go up, supply goes down; when prices go down, supply goes up

d. when prices go down, supply goes down; when prices go up, supply goes up

5.1 Question 2

The law of supply states thata. when prices go up, quantity supplied goes

down; when prices go down, quantity supplied goes up

b. when prices go down, quantity supplied goes down; when prices go up, quantity supplied goes up

c. when prices go up, supply goes down; when prices go down, supply goes up

d. when prices go down, supply goes down; when prices go up, supply goes up

5.1 Question 3

A supply schedule is aa. table showing how much of a product

someone is willing and able to buyb. graph showing how much of a product

someone is willing and able to buyc. table showing how much of a product

someone is willing and able to selld. graph showing how much of a product

someone is willing and able to sell

5.1 Question 3

A supply schedule is aa. table showing how much of a product

someone is willing and able to buyb. graph showing how much of a product

someone is willing and able to buyc. table showing how much of a product

someone is willing and able to selld. graph showing how much of a product

someone is willing and able to sell

5.1 Question 4

Supply curves are created using the assumption that all economic factors remain constant except

a. demandb. elasticityc. priced. production

5.1 Question 4

Supply curves are created using the assumption that all economic factors remain constant except

a. demandb. elasticityc. priced. production

5.1 Question 5

What motivates producers to increase supply?a. efficiencyb. demandc. profitd. thrift

5.1 Question 5

What motivates producers to increase supply?a. efficiencyb. demandc. profitd. thrift

5.3 Question 1

What do the different points along a supply curve show?

a. changes in costsb. changes in productivityc. changes in quantity suppliedd. changes in supply

5.3 Question 1

What do the different points along a supply curve show?

a. changes in costsb. changes in productivityc. changes in quantity suppliedd. changes in supply

5.3 Question 2

What is an excise tax?a. a tax on the removal of toxic materialb. a tax on goods that are exported to another

countryc. a tax on the production or sale of specific

goods or servicesd. a tax on the purchase of goods or services

from overseas

5.3 Question 2

What is an excise tax?a. a tax on the removal of toxic materialb. a tax on goods that are exported to another

countryc. a tax on the production or sale of specific

goods or servicesd. a tax on the purchase of goods or services

from overseas

5.3 Question 3

What is it called when government controls business behavior through rules or laws?

a. dutyb. inspectionc. regulationd. subsidy

5.3 Question 3

What is it called when government controls business behavior through rules or laws?

a. dutyb. inspectionc. regulationd. subsidy

5.3 Question 4

What is the most likely outcome when the number of producers of a particular product rises?

a. a decrease in competitionb. a rise in pricec. an increase in supplyd. a decrease in supply

5.3 Question 4

What is the most likely outcome when the number of producers of a particular product rises?

a. a decrease in competitionb. a rise in pricec. an increase in supplyd. a decrease in supply

5.3 Question 5

Which of the following are examples of government actions?

a. excise tax, input costs, regulationb. productivity, regulation, subsidyc. excise tax, input costs, productivityd. excise tax, regulation, subsidy

5.3 Question 5

Which of the following are examples of government actions?

a. excise tax, input costs, regulationb. productivity, regulation, subsidyc. excise tax, input costs, productivityd. excise tax, regulation, subsidy

5.4 Question 1

Elasticity of supply measures how responsivea. consumers are to price changeb. government is to price changec. producers are to price changed. workers are to price change

5.4 Question 1

Elasticity of supply measures how responsivea. consumers are to price changeb. government is to price changec. producers are to price changed. workers are to price change

5.4 Question 2

Which of the following examples demonstrates elastic supply?

a. The price of submarine sandwiches rises 50 percent; the quantity supplied by the deli rises 30 percent.

b. Gasoline prices rise from $1.50 to $3.00 a gallon, and refineries increase production 10 percent.

c. Nurseries cut the price of rose bushes in half, but because the bushes are two years old, supply remains fixed.

d. A CD fails to be a hit, stores discount it by 30 percent, and the recording company lowers production by 50 percent.

5.4 Question 2

Which of the following examples demonstrates elastic supply?

a. The price of submarine sandwiches rises 50 percent; the quantity supplied by the deli rises 30 percent.

b. Gasoline prices rise from $1.50 to $3.00 a gallon, and refineries increase production 10 percent.

c. Nurseries cut the price of rose bushes in half, but because the bushes are two years old, supply remains fixed.

d. A CD fails to be a hit, stores discount it by 30 percent, and the recording company lowers production by 50 percent.

5.4 Question 3

What is the most common reason for supply to be inelastic?

a. the difficulty of changing the amount produced

b. the lack of competition among producersc. the amount of government regulationd. the lack of demand among consumers

5.4 Question 3

What is the most common reason for supply to be inelastic?

a. the difficulty of changing the amount produced

b. the lack of competition among producersc. the amount of government regulationd. the lack of demand among consumers

5.4 Question 4

Which of the following is most likely to have elasticity of supply for their product?

a. apple growerb. car manufacturerc. electronics manufacturerd. wedding-cake baker

5.4 Question 4

Which of the following is most likely to have elasticity of supply for their product?

a. apple growerb. car manufacturerc. electronics manufacturerd. wedding-cake baker

5.4 Question 5

What do both elasticity of demand and elasticity of supply measure?

a. responsiveness to priceb. responsiveness to quantityc. desires of consumersd. desires of producers

5.4 Question 5

What do both elasticity of demand and elasticity of supply measure?

a. responsiveness to priceb. responsiveness to quantityc. desires of consumersd. desires of producers