Multiple Choice: Identify the letter of the choice that best completes the
statement or questions.
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1.
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For
some industries like agriculture, the government provides subsidies or stockpiles products in order
to stabilize prices. How does this affect the supply curves of these products? a. | The supply curve
is not affected. | c. | The supply curve
shifts to the right. | b. | The supply curve shifts to the
left. | d. | The supply curve
becomes more steep. | | | | |
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2.
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What
do sellers do if they expect the price of goods they sell to decrease in the near
future? a. | sell the goods
now and try to invest the money instead of resupplying | b. | sell the goods
now but try to get higher prices for them | c. | store the goods until the prices rise | d. | store the goods
indefinitely regardless of when the price rises | | |
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3.
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Which
of the following would result in a movement along the supply curve for wool socks? a. | an increase in
wages for factory workers | c. | a decrease in
government subsidies | b. | an increase in tariffs on imported
goods | d. | a decrease the
price of wool socks | | | | |
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4.
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When
producers offer more products for sale at each and every price, a. | the supply curve
has shifted to the right. | c. | the cost per
unit increases. | b. | the supply curve has shifted to the
left. | d. | they are less
productive. | | | | |
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5.
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Which
of the following is the best example of the law of supply? a. | A tortilla
factory decreases the number of tortillas they supply when the price
increases. | b. | A hog farmer increases the number of hogs he raises when the
price of hogs increases. | c. | A musician decides to become an accountant when the price of
concert tickets rises. | d. | An auto maker closes factories when the price of automobiles
rises. | | |
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6.
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As a
result of an increase in the popularity of tinted windshields, the price of tinted windshields
increased 25%. If the quantity supplied increased 35%, what can be said about the supply
curve? a. | The curve
shifted to the left. | c. | The curve is
elastic. | b. | The curve shifted to the right. | d. | The curve is inelastic. | | | | |
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7.
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All
of the following can change the market supply curve EXCEPT a. | the cost of
energy. | b. | the expectation that prices are about to
increase. | c. | a change in the price of the product. | d. | the level of
business taxes. | | |
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8.
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Why
do marginal costs increase as quantity supplied increases? a. | the capital
costs decrease | c. | employees pay
workers less per hour | b. | opportunity costs decrease | d. | labor costs per hour increase | | | | |
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9.
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What
factor has the greatest influence on elasticity and inelasticity of supply? a. | supply
costs | c. | time | b. | labor costs | d. | credit requirements | | | | |
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10.
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The
supply of a product normally increases if a. | the cost of inputs goes up. | c. | the price of the product increases. | b. | fewer producers
are in the market. | d. | taxes on the
product decrease. | | | | |
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