Economics Quiz

Supply describes the quantity of a product that a producer is willing and able to sell at a particular price in a time period.

• TRUE

• FALSE

Marginal revenue refers to the cost of increasing production by one additional unit of a product.

• TRUE

• FALSE

There is an inverse relationship between price and supply.

• TRUE

• FALSE

A demand curve shows the relationship between supply and price in graphical form.

• TRUE

• FALSE

A leftward shift in the supply curve depicts a decrease in supply.

• TRUE

• FALSE

Many countries buy oil from Saudi Arabia. Which change is most likely to lead to a fall in the price of a barrel of oil?

• an increase in demand of 10% with no change in supply

• an increase in demand of 10% with an increase in supply of 10%

• no change in demand with a 10% decrease in supply

• no change in demand with a 10% increase in supply

Drought in African countries often results in poor harvests. Other countries then help by sending quantities of food. What are the likely results of these events for the price of food in the drought-affected countries?

• It will fall and then rise.

• It will rise and continue to rise.

• It will rise and remain at this higher level.

• It will rise and then fall.

In 2011 the US Government declared that the country must increase the manufacture of fuel from crops such as corn that have previously only been used for food. What is likely to happen in the market for corn?

• a movement along the demand curve for corn

• a movement along the supply curve for corn

• a shift to the left in the demand curve for corn

• a shift to the left in the supply curve for corn

There is a change in the supply of a product (known as increase and decrease in supply) when conditions of supply change and there is a ........................................ in the original supply curve towards the generation of a new curve.

There is a change in the quantity supplied of a product (known as extension and contraction in supply) only when there is a change in the ............................................... of the good or service.