1. What is the difference between an "increase in supply" and an "increase in quantity supplied"?
- There is no difference between the two terms; they both refer to a movement along a given supply curve.
- There is no difference between the two terms; they both refer to a shift of the supply curve.
- An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" refers to a movement along a given supply curve in response to an increase in price.
- An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" means at any given price supply has increased.
2. An increase in price of inputs would be represented by a movement from
- A to B.
- B to A.
- S2 to S1.
- S1 to S2.
3. An increase in the number of firms in the market would be represented by a movement from
- S1 to S2.
- S2 to S1.
- A to B.
- B to A.
4. An increase in the price of substitutes in production would be represented by a movement from
- B to A.
- S2 to S1.
- A to B.
- S1 to S2
5. If a firm expects that the price of its product will be higher in the future than it is today
- the firm will go out of business.
- the firm has an incentive to decrease quantity supplied now and increase quantity supplied in the future.
- the firm has an incentive to increase supply now and decrease supply in the future.
- the firm has an incentive to decrease supply now and increase supply in the future.
8. A decrease in the price of GPS systems will result in
- a larger quantity of GPS systems supplied.
- an increase in the supply of GPS systems.
- a smaller quantity of GPS systems supplied.
- a decrease in the demand for GPS systems.
9.. Which of the following is the correct way to describe equilibrium in a market?
- At equilibrium, quantity demanded equals quantity supplied.
- At equilibrium, market forces no longer apply.
- At equilibrium, demand equals supply.
- At equilibrium, scarcity is eliminated.