Question 1 Which best describes a supply curve? a) The quantity consumers would like to buy in an ideal world b) The quantity producers are willing and able to sell at each and every price all other things unchanged c) The quantity producers are willing and able to sell at each and every income all other things unchanged d) The quantity producers are willing and able to sell at each and every point in time all other things unchanged Question 2 If a 4% increase in price leads to a increase in the quantity supplied of 8%: a) Supply is price elastic b) Supply is income elastic c) Price elasticity of demand is -2 d) Price elasticity of supply is -2 Question 3 Supply is likely to be more price elastic: a) In the short run rather than the long run b) If factors of production are relatively immobile between industries c) If there are very few producers d) If it is easy to expand output Question 4 A supply curve that starts at the origin has: a) A price elasticity of supply greater than one b) A price elasticity of supply equal to one c) A price elasticity of supply less than one d) A positive price elasticity of supply Question 5 A contraction in supply occurs when: a) Demand shifts outwards b) The supply curve shifts inwards c) The quantity supplied falls when the price falls d) The supply curve shifts outwards Question 6 An increase in the costs of production will: a) Shift demand outwards b) Shift demand inwards c) Shift supply outwards so more is supplied at each and every price, all other things unchanged d) Shift supply inwards Question 7 An increase in price, all other things unchanged, leads to: a) A shift in supply outwards b) A shift in supply inwards c) A contraction of supply d) An extension of supply Question 8 An increase in productivity should: a) Lead to a contraction of supply b) Lead to an expansion of supply c) Lead to a shift in supply outwards (i.e. more supplied at each and every price) d) Lead to an inward shift in supply Question 9 An increase in price from 25 pence to 30 pence leads to an increase in the quantity supplied from 40 units to 44 units. The price elasticity of supply is: a) + 2 b) + 0.5 c) - 2 d) - 0.5 Question 10 The price elasticity of supply is +4. The price increases by 15%. Sales were originally 200 units. What will they be now? a) 80 units b) 320 units c) 60 units d) 120 units