Unlock hundreds more features
Save your Quiz to the Dashboard
View and Export Results
Use AI to Create Quizzes and Analyse Results

OR
Sign inSign in with Facebook
Sign inSign in with Google
Quizzes > High School Quizzes > Social Studies

Law of Supply Practice Quiz

Master key concepts for exam success

Difficulty: Moderate
Grade: Grade 10
Study OutcomesCheat Sheet
Colorful paper art promoting Supply Law Unlocked, an engaging trivia quiz for law and economics students.

What does the law of supply state?
As the price of a good increases, the quantity supplied increases.
As the price of a good increases, the quantity supplied decreases.
An increase in price reduces the incentive for producers to supply more.
Price and quantity supplied are unrelated.
The law of supply states that, ceteris paribus, an increase in price results in an increase in quantity supplied. This is because higher prices provide an incentive for producers to produce more.
Which factor directly causes a movement along the supply curve?
A change in consumer preferences.
A change in government regulations.
A change in the product's price.
A change in production technology.
Only a change in the product's price leads to a movement along the supply curve. Other factors, like technology or regulations, cause the entire curve to shift.
What is typically represented on the vertical axis of a supply curve graph?
Price.
Quantity supplied.
Market demand.
Production cost.
In standard graphs of supply and demand, the vertical axis represents price. The horizontal axis shows the quantity, making it easier to analyze changes in market behavior.
Why is the supply curve generally upward sloping in a competitive market?
Because producers are willing to supply more as prices increase.
Due to government intervention in pricing.
Because higher prices decrease production incentives.
Because consumers demand more at higher prices.
The upward slope of the supply curve reflects that higher prices provide greater incentives for producers to increase output. This relationship is a fundamental principle in supply law.
What happens to the quantity supplied if the price of a product rises while all other factors remain constant?
It decreases.
It remains the same.
It increases.
It becomes unpredictable.
According to the law of supply, when the price of a product increases and all other factors remain constant, producers are incentivized to supply a greater quantity. This is because higher prices often lead to higher potential profits.
Which of the following represents a shift in the supply curve rather than a movement along it?
A change in production technology.
A temporary change in product price.
An increase in quantity supplied due to higher price.
A fluctuating market price during the day.
A change in production technology alters the production process and affects the entire supply relationship. This causes the supply curve to shift, unlike a price change which causes a movement along the curve.
How does an improvement in technology affect the supply of a product?
It increases the supply, shifting the curve to the right.
It only affects the demand for the product.
It has no significant effect on the supply.
It decreases the supply, shifting the curve to the left.
An improvement in technology typically reduces production costs, allowing producers to supply more at every price level. This results in a rightward shift of the supply curve.
If the cost of raw materials rises, what is the effect on the supply curve?
There is no change in the supply curve.
It shifts to the left, indicating a decrease in supply.
It becomes perfectly elastic.
It shifts to the right, indicating an increase in supply.
An increase in raw material costs raises the overall production costs for firms. This decrease in profitability causes the supply curve to shift to the left.
Which term best describes the responsiveness of quantity supplied to a change in price?
Cross-price elasticity.
Income elasticity.
Supply coefficient.
Price elasticity of supply.
Price elasticity of supply measures the percentage change in quantity supplied in response to a percentage change in price. It quantifies how sensitive producers are to price fluctuations.
If the supply of apples has an elasticity of 1.5, what can be inferred about the supply behavior?
The supply is unitary elastic.
It is inelastic, with minimal responsiveness to price changes.
It indicates that the supply is perfectly elastic.
It is elastic, meaning quantity supplied is highly responsive to price changes.
An elasticity greater than 1 signifies that the quantity supplied is highly responsive to price changes. In this case, an elasticity of 1.5 means that a 1% increase in price will result in a 1.5% increase in quantity supplied.
What does the term 'ceteris paribus' imply in the analysis of supply?
It applies only to demand, not supply.
It disregards the role of technology.
All other factors are held constant.
Only prices are variable while others change.
'Ceteris paribus' is a Latin phrase meaning 'all other things being equal.' It allows analysis of how a change in one variable, such as price, affects quantity supplied while holding other factors constant.
Which scenario would shift the supply curve even if the product's price remains unchanged?
Seasonal variations in consumer preferences.
A temporary fluctuation in demand.
An increase in the price of the product.
A significant change in production costs.
A significant change in production costs affects the overall ability of producers to supply a product, thereby shifting the supply curve. This effect is independent of any change in the product's current price.
Which legal factor can influence a firm's supply decision in a competitive market?
Fluctuations in weather patterns.
Government regulations and taxes.
Increased competition among consumers.
Changes in consumer taste.
Government regulations and taxes can affect a firm's production costs and overall operations. Such legal factors directly influence a firm's decision on how much to supply in the market.
What is the typical effect of a new sales tax on the supply curve for a product?
It shifts the supply curve to the right, increasing supply.
It shifts the supply curve to the left, reducing supply.
It makes the supply curve steeper without shifting it.
It causes a movement along the supply curve due to price changes.
A new sales tax increases production costs, leading firms to supply less at each price level. This reduction in supply is depicted as a leftward shift of the supply curve.
Which of the following is least likely to affect the law of supply?
Changes in input prices.
Technological advancements.
Consumer income changes.
Changes in taxation policies.
Consumer income primarily influences demand rather than supply. The law of supply focuses on factors like production costs, technology, and taxes which directly affect producers.
How does a government subsidy typically affect the supply curve?
It shifts the supply curve to the left by increasing production costs.
It shifts the supply curve to the right by reducing production costs.
It makes the supply curve vertical.
It has no impact on the supply curve.
A government subsidy reduces production costs, which encourages producers to increase their output. This results in a rightward shift of the supply curve, reflecting an increase in supply.
Which scenario best exemplifies a movement along the supply curve rather than a shift?
A new environmental regulation increasing production costs.
An innovation in television manufacturing technology increasing output.
A decrease in the market price of televisions leading to lower quantity supplied.
A rise in component prices causing cost increases.
A change in the market price of televisions that results in a different quantity supplied represents movement along the supply curve. Other scenarios involve changes in production conditions that shift the entire curve.
When both the price and the quantity supplied of a product increase simultaneously, what is being observed?
A shift of the supply curve to the right.
A movement along the supply curve.
An inefficient market response.
A change in market demand.
An increase in both price and quantity supplied, with other factors held constant, is a characteristic movement along the supply curve. This occurs as producers respond to higher prices by offering more goods.
Which real-world event is most likely to cause the supply curve for electric vehicles to shift right?
Stricter safety regulations for electric vehicles.
Technological breakthroughs that lower battery production costs.
A decline in consumer income levels.
An increase in the global price of raw materials.
Technological breakthroughs that reduce battery production costs lower the overall cost of manufacturing electric vehicles. This improvement incentivizes producers to increase supply, thereby shifting the supply curve to the right.
In a perfectly competitive market, what ensures that individual firms are price takers in accordance with the law of supply?
High barriers to entry.
Government-imposed price ceilings.
A single firm's market dominance.
The presence of many small firms with negligible market influence.
In a perfectly competitive market, a large number of small firms ensures that no single company can influence the market price. This condition makes each firm a price taker, which is a core assumption of the law of supply in such markets.
0
{"name":"What does the law of supply state?", "url":"https://www.quiz-maker.com/QPREVIEW","txt":"What does the law of supply state?, Which factor directly causes a movement along the supply curve?, What is typically represented on the vertical axis of a supply curve graph?","img":"https://www.quiz-maker.com/3012/images/ogquiz.png"}

Study Outcomes

  1. Understand the fundamental principles of the law of supply.
  2. Analyze how supply factors impact market behavior.
  3. Apply economic reasoning to supply law scenarios.
  4. Evaluate the strengths and weaknesses of supply law concepts in exam-style questions.
  5. Synthesize legal and economic perspectives on supply dynamics.

Law of Supply Quiz: What It Declares? Cheat Sheet

  1. Understanding the Law of Supply - In economics, the law of supply tells us that when prices climb, producers get excited and supply more goods to cash in on higher profits. It's like a bonus level: the higher the reward, the more effort you put in! Learn more
  2. Supply Curve Representation - Picture a graph with price on the vertical axis and quantity on the horizontal axis: the supply curve slopes upward because higher prices lure producers into offering more products. This visual helps you see how price changes influence supply at a glance. Learn more
  3. Factors Influencing Supply - Supply shifts when things like production costs, new tech, taxes, or regulations change - think of them as game modifiers that boost or hinder your output. If a breakthrough invention lowers costs, it's a power”up that shifts supply to the right! Learn more
  4. Supply Elasticity - Supply elasticity measures how much quantity supplied responds to price changes - like gauging how stretchy a rubber band is when you pull it. If it's super stretchy (elastic), a small price bump leads to a big output jump; if it's stiff (inelastic), output barely changes. Learn more
  5. Equilibrium Price and Quantity - The sweet spot where supply meets demand is called equilibrium, where the quantity supplied equals the quantity demanded and the market "clears" without leftovers or shortages. Think of it as perfect balance in a seesaw! Learn more
  6. Short-Run vs. Long-Run Supply - In the short run, firms are stuck with fixed factories and machinery, so supply can be rigid when prices change. Over the long run, companies can build new plants or upgrade equipment, making supply more flexible and responsive. Learn more
  7. Impact of Production Costs - Rising wages or pricier raw materials act like a penalty in your production game, reducing supply if profits shrink. Conversely, cheaper inputs are like extra lives that let you produce more at existing prices. Learn more
  8. Technological Advancements - Innovation is your secret weapon - automation or new software can boost efficiency, slash costs, and let you supply more without breaking a sweat. It's like upgrading from a bicycle to a rocket! Learn more
  9. Government Policies and Taxes - Subsidies can give producers a thumbs‑up to ramp up output, while taxes or strict regulations might rain on their parade and shrink supply. Understanding these policies is like knowing the rulebook before playing a strategy game. Learn more
  10. Real-World Application - Businesses use the law of supply to plan production and pricing - if they expect prices to surge, they'll stock up and crank out more goods to maximize profits. It's like stocking your inventory before a holiday sale! Learn more
Make a Quiz (FREE) Copy & Edit This Quiz Create a Quiz with AI

Social Studies Quizzes

Powered by: Quiz Maker