Supply Review
What To Know…
What is supply?
Law of supply
How the supply curve slopes
The 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)
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 STUDY and you will do well!
5.1 Question 1
The desire and ability to produce and sell a product is
a. demand
b. production
c. profit
d. supply
5.1 Question 1
The desire and ability to produce and sell a product is
a. demand
b. production
c. profit
d. supply
5.1 Question 2
The law of supply states that
a. 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 that
a. 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 a
a. table showing how much of a product someone is
willing and able to buy
b. graph showing how much of a product someone is
willing and able to buy
c. table showing how much of a product someone is
willing and able to sell
d. graph showing how much of a product someone is
willing and able to sell
5.1 Question 3
A supply schedule is a
a. table showing how much of a product someone is
willing and able to buy
b. graph showing how much of a product someone is
willing and able to buy
c. table showing how much of a product someone is
willing and able to sell
d. 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. demand
b. elasticity
c. price
d. production
5.1 Question 4
Supply curves are created using the assumption that
all economic factors remain constant except
a. demand
b. elasticity
c. price
d. production
5.1 Question 5
What motivates producers to increase supply?
a. efficiency
b. demand
c. profit
d. thrift
5.1 Question 5
What motivates producers to increase supply?
a. efficiency
b. demand
c. profit
d. thrift
5.3 Question 1
What do the different points along a supply curve
show?
a. changes in costs
b. changes in productivity
c. changes in quantity supplied
d. changes in supply
5.3 Question 1
What do the different points along a supply curve
show?
a. changes in costs
b. changes in productivity
c. changes in quantity supplied
d. changes in supply
5.3 Question 2
What is an excise tax?
a. a tax on the removal of toxic material
b. a tax on goods that are exported to another country
c. a tax on the production or sale of specific goods or
services
d. 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 material
b. a tax on goods that are exported to another country
c. a tax on the production or sale of specific goods or
services
d. 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. duty
b. inspection
c. regulation
d. subsidy
5.3 Question 3
What is it called when government controls business
behavior through rules or laws?
a. duty
b. inspection
c. regulation
d. 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 competition
b. a rise in price
c. an increase in supply
d. 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 competition
b. a rise in price
c. an increase in supply
d. a decrease in supply
5.3 Question 5
Which of the following are examples of government
actions?
a. excise tax, input costs, regulation
b. productivity, regulation, subsidy
c. excise tax, input costs, productivity
d. excise tax, regulation, subsidy
5.3 Question 5
Which of the following are examples of government
actions?
a. excise tax, input costs, regulation
b. productivity, regulation, subsidy
c. excise tax, input costs, productivity
d. excise tax, regulation, subsidy
5.4 Question 1
Elasticity of supply measures how responsive
a. consumers are to price change
b. government is to price change
c. producers are to price change
d. workers are to price change
5.4 Question 1
Elasticity of supply measures how responsive
a. consumers are to price change
b. government is to price change
c. producers are to price change
d. 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 producers
c. the amount of government regulation
d. 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 producers
c. the amount of government regulation
d. 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 grower
b. car manufacturer
c. electronics manufacturer
d. wedding-cake baker
5.4 Question 4
Which of the following is most likely to have elasticity
of supply for their product?
a. apple grower
b. car manufacturer
c. electronics manufacturer
d. wedding-cake baker
5.4 Question 5
What do both elasticity of demand and elasticity of
supply measure?
a. responsiveness to price
b. responsiveness to quantity
c. desires of consumers
d. desires of producers
5.4 Question 5
What do both elasticity of demand and elasticity of
supply measure?
a. responsiveness to price
b. responsiveness to quantity
c. desires of consumers
d. desires of producers