Completion
Complete each
statement.
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1.
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A(n) ______________________________ between two factors exists when the factors
move in the same direction (for example, when one rises, the other rises).
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2.
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A graph that shows the amount of a good sellers are willing and able to sell at
various prices is called a(n) ______________________________.
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3.
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A(n) ______________________________ is a numerical chart illustrating the law of
supply (lists prices and the quantity supplied at those prices).
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4.
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______________________________ refers to the willingness and ability of sellers
to produce and offer to sell different quantities of a good at different prices during a specific
time period.
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5.
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______________________________ refers to the number of units of a good produced
and offered for sale by the producer, which is determined by the price.
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6.
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As ______________________________ advances, the body of skills and knowledge
concerning the use of resources in production increases, thus improving society’s ability to
produce more with a fixed amount of resources.
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7.
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The average cost of a good is also referred to as the
______________________________ cost.
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8.
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A(n) ______________________________ is a financial payment made by government to
producers for certain actions, like producing more or less of a good.
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9.
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A legal limit on the number of units of a foreign-produced good that can enter a
country is called a(n) ______________________________.
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10.
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Supply is ______________________________ when the percentage change in the
quantity supplied is less than the percentage change in price.
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Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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11.
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The law of supply says that
a. | the quantity supplied of a good rises when the price of the good
rises. | b. | the quantity supplied of a good decreases when the price of the good
rises. | c. | sellers prefer low prices to high prices. | d. | a seller must
have both the willingness and ability to produce a good. |
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12.
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Quantity supplied refers to
a. | a shift of the supply curve to the left. | b. | a shift of the
supply curve to the right. | c. | the amount supplied at a particular
price. | d. | the amount demanded at a particular price. |
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13.
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A supply schedule includes
a. | price and quantity supplied at each price. | b. | the producer’s
cost. | c. | shifts to the left or right of the supply curve. | d. | Both a and
b |
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14.
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If sellers do not respond to a change in price, supply is
a. | elastic. | c. | unit-elastic. | b. | inelastic. | d. | None of the
above |
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15.
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Which of the following can cause a supply curve to shift?
a. | weather | c. | number of sellers | b. | future price expectations | d. | All of the
above |
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16.
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When quantity supplied changes by the same percentage as price, it is
a. | elastic. | c. | unit-elastic. | b. | inelastic. | d. | a subsidized
good. |
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17.
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A vertical supply curve indicates that
a. | a change in price will have no effect on the quantity supplied. | b. | there is a direct
relationship between price and quantity supplied. | c. | producers will increase their
production. | d. | a price change will have a significant impact on the quantity
supplied. |
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18.
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Higher per-unit production costs would cause producers to
a. | want to produce more. | c. | supply more. | b. | hire more workers. | d. | supply less. |
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19.
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On the accompanying graph, which of the following correctly represents the
supplier’s response to a decrease in the costs of production?
a. | a shift from S1 to S2 | c. | movement from A to
B | b. | a shift from S1 to S3 | d. | movement from C to
B |
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20.
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If the price of a product increases, we would expect the accompanying graph to
show
a. | a shift from S1 to S2. | c. | movement from A to
B. | b. | a shift from S1 to S3. | d. | movement from C to
B. |
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21.
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The word supply refers to
a. | the willingness and desire to produce a good. | b. | the ability to
produce the good. | c. | the willingness and ability to produce a
good. | d. | the quantity produced of a particular good. |
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22.
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The law of supply is shown on a graph as
a. | an inverse relationship. | c. | a shift of the curve to the right
or left. | b. | a direct relationship. | d. | a shift of the curve up or down. |
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23.
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If you are a baker who specializes in bagels, and the price of flour falls,
which of the following scenarios is most likely?
a. | You would be willing and able to produce fewer bagels than
before. | b. | Buyers would have greater demand for your bagels. | c. | Buyers would have
less demand for your bagels. | d. | You would be willing and able to produce more
bagels than before. |
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24.
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A supply curve is a reflection of
a. | what consumers are willing and able to purchase. | b. | what suppliers are
willing and able to produce. | c. | what suppliers purchase from their input
sources. | d. | what the demand schedule lists, including prices and quantities demanded at those
prices. |
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25.
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The supply curve of one of Pablo Picasso’s (1881–1973) paintings
would be shown as
a. | upward-sloping, left-to-right. | c. | a vertical
line. | b. | downward-sloping, left-to-right. | d. | a horizontal
line. |
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26.
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A market supply curve is composed of
a. | a firm’s supply curve. | b. | the sum of all firms’ supply
curves. | c. | buyers’ demand for a good. | d. | buyers’ demand and sellers’
production of a good. |
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27.
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A direct relationship exists when
a. | price and quantity supplied move in the same direction. | b. | price and quantity
supplied move in opposite directions. | c. | a change in price causes the supply curve to
shift to the left. | d. | a change in price causes the supply curve to
shift to the right. |
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28.
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When additional units cannot be produced or there is no time to produce more,
the supply curve
a. | is horizontal. | c. | is vertical. | b. | is upward sloping, left to
right. | d. | will
shift. |
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29.
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Quantity supplied changes because of
a. | a change in resource prices. | c. | a change in
price. | b. | advances in technology. | d. | Both a and b |
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30.
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Elasticity of supply is measured by looking at the relationship between
a. | how much the price of the good responds to changes in taxes. | b. | how much the
quantity supplied responds to changes in the price of the good. | c. | how much the
quantity supplied responds to changes in resource prices. | d. | how much sellers
respond to advances in technology. |
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31.
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In the equation for elasticity of supply, when the numerator is larger than the
denominator, we know that
a. | supply is not very responsive to price change. | b. | supply is
unit-elastic. | c. | supply is inelastic. | d. | supply is
elastic. |
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32.
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Which of the following supply curves demonstrates inelastic supply?
a. | a vertical supply curve | b. | a horizontal supply curve | c. | an upward-sloping
curve from left to right | d. | a downward-sloping curve from left to
right |
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33.
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Which of the following products would be most inelastic?
a. | T-shirts | c. | shoes | b. | theater seats tonight | d. | fast food |
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34.
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If the percentage change in price is equal to 50 percent and the percentage
change in quantity supplied is 25 percent, the elasticity of supply is
a. | unit-elastic. | c. | inelastic. | b. | elastic. | d. | not affected. |
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Use these two graphs to answer the following questions. 
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35.
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If a tax were applied to the firm’s product, which of the following
represents the seller’s response?
a. | a shift from S1 to S2 | c. | movement from A to
B | b. | a shift from S1 to S3 | d. | movement from C to
B |
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36.
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If a new quota were imposed on a seller’s product, which of the following
would show the seller’s response?
a. | a shift from S1 to S2 | c. | movement from A to
B | b. | a shift from S1 to S3 | d. | movement from C to
B |
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37.
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More sellers entering a market would look like
a. | a shift from S1 to S2. | c. | movement from A to
B. | b. | a shift from S1 to S3. | d. | movement from C to
B. |
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38.
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If the government offers sellers a subsidy for production, the graph would
show
a. | a shift from S1 to S2. | c. | movement from A to
B. | b. | a shift from S1 to S3. | d. | movement from C to
B. |
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39.
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If prices fall for a product, we could expect the graph to show
a. | a shift from S1 to S2. | c. | movement from A to
B. | b. | a shift from S1 to S3. | d. | movement from C to
B. |
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40.
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An advance in technology would be illustrated on a graph as
a. | a shift from S1 to S2. | c. | movement from A to
B. | b. | a shift from S1 to S3. | d. | movement from C to
B. |
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