Law of Supply

Q.

When the prices of a good increases, ______

1. Quantity demanded increases

2. Quantity demanded decreases

3. Quantity supplied increases

4. Quantity supplied decreases

Q.

The price of a good and the quantity supplied are ______ related.

1. inversely

2. exponentially

3. positively

4. negatively

Q.

The supply curve is upward sloping because __________.

1. quantity demanded decreases when price increases

2. costs increase when the price increases

3. As the price increases, suppliers can justify producing at higher marginal costs

4. All of the above

Q. The price of a good and the quantity supplied are related.

1. positively
2. negatively
3. inversely
4. exponentially

Q.

Study the supply curve given in the figure.

If the market price is $8, what is the quantity supplied?

1. 20

2. 30

3. 40

4. 10

Q.

Assume that firms in an industry observe a 10% increase in the productivity of labor, but to get there they had to increase the cost of labor by 5%. What should be expected to happen in the output market as a result of this development?

1. The supply should increase

2. The supply should decrease

3. The supply should remain unchanged

4. The demand should increase