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Economics Questions and Answers, which are covered in this chapter, relate to the topic, Theory of Supply. Economics Questions and Answers Test contains 10 questions. Answers to Economics MCQs are available at the end of the last question.

1. The supply of a good refers to:

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(a) Actual production of goods

(b) Total stock of goods

(c) Stock available for sale

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(d) Amount of goods offered for sale at a particular price per unit time

2. Increase or Decrease in Supply means:

(a) Shift in Supply curve

(b) Movement along same supply curve

(c) Both (a) and (b)

(d) Neither (a) or (b)

3. If supply curve is Perfectly Inelastic, the supply curve is:

(a) Vertical

(b) Horizontal

(c) Upward sloping

(d) Downward sloping

4. When supply price increase in the short run, the profit of the producer _____:

(a) Increases

(b) Decreases

(c) Remains constant

(d) Decreases marginally

5. A change in the supply of a commodity along with same supply curve may occur due to :

(a) Change in the price of the commodity

(b) Change in the prices of related goods

(c) Change in the future, expectations about the price of the good

(d) Change in the cost of inputs

6. What is the elasticity of supply, when price changes from ` 15 to ` 12 and supply change from 6 units to 5 units?

(a) 0.77

(b) 0.87

(c) 0.833

(d) 0.58

7. A perfectly inelastic supply curve will be

(a) Parallel to X axis

(b) Parallel to Y axis

(c) Downward sloping

(d) None of these

8. If the supply of a commodity is perfectly elastic, an increase in demand will result in:

(a) Decrease in both price and quantity at equilibrium

(b) Increase in both price and quantity at equilibrium

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(c) Increase in equilibrium quantity, equilibrium price remaining constant

(d) Increase in equilibrium price, equilibrium quantity remaining constant

9. When change in the quantity supplied is proportionate to the change in the price, the producer is said to have______:

(a) Perfectly elastic supply

(b) Relatively elastic supply

(c) Unitary elastic supply

(d) Perfectly inelastic supply

10. Expansion in supply refers to a situation when the producers are willing to supply a :

(a) Larger quantity of the commodity at an increased price

(b) larger quantity of the commodity due to increased taxation on that commodity

(c) Larger quantity of the commodity at the same price

(d) larger quantity of the commodity at the decreased price

ANSWERS

1. (d) Amount of goods offered for sale at a particular price per unit time

2. (a) Shift in Supply curve

3. (a) Vertical

4. (a) Increases

5. (a) Change in the price of the commodity

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6. (c) 0.833

7. (b) Parallel to Y axis

8. (c) Increase in equilibrium quantity, equilibrium price remaining constant

9. (c) Unitary elastic supply

10 (a) Larger quantity of the commodity at an increased price