High School Economics: Supply Curve Review Questions

📚 Quick Study Guide

• 📈 Definition of Supply: Represents the quantity of a good or service that producers are willing and able to offer for sale at various prices during a specific time period.
• 💸 Law of Supply: States that, all else being equal, as the price of a good or service increases, the quantity supplied of that good or service also increases, and vice versa.
• ➡️ Supply Curve: A graphical representation of the relationship between the price of a good or service and the quantity supplied. Price is usually on the vertical axis, and quantity supplied is on the horizontal axis.
• ➕ Factors Shifting the Supply Curve (Determinants of Supply):
  • 🏭 Input Prices: The cost of resources used to produce a good or service (e.g., wages, raw materials). An increase in input prices decreases supply (shifts the curve left).
  • 🧪 Technology: Improvements in technology generally increase supply (shifts the curve right).
  • 🏛️ Government Regulations: Taxes decrease supply (shifts the curve left), while subsidies increase supply (shifts the curve right).
  • 👨‍💼 Number of Sellers: More sellers in the market increase supply (shifts the curve right).
  • 🔮 Expectations of Future Prices: If producers expect prices to rise in the future, they may decrease supply today to sell more later.
• 📐 Formula for percentage change in quantity supplied: $ \frac{\text{Change in Quantity Supplied}}{\text{Original Quantity Supplied}} \times 100 $

Practice Quiz

1. Which of the following would cause an *increase* in the supply of gasoline?
   1. A. An increase in the price of crude oil.
   2. B. A decrease in the number of gasoline refineries.
   3. C. An improvement in the technology used to refine gasoline.
   4. D. An expectation that gasoline prices will be higher next month.
2. According to the law of supply, which of the following statements is correct?
   1. A. As price increases, quantity supplied decreases.
   2. B. As price decreases, quantity supplied increases.
   3. C. As price increases, quantity supplied increases.
   4. D. Price and quantity supplied are unrelated.
3. A leftward shift of the supply curve indicates:
   1. A. An increase in supply.
   2. B. A decrease in supply.
   3. C. No change in supply.
   4. D. An increase in demand.
4. Which of the following factors would *not* cause a shift in the supply curve?
   1. A. A change in input prices.
   2. B. A change in consumer tastes.
   3. C. A change in technology.
   4. D. A change in the number of sellers.
5. A subsidy given to producers will typically:
   1. A. Decrease supply.
   2. B. Increase supply.
   3. C. Not affect supply.
   4. D. Decrease demand.
6. If the price of wheat, a key input in bread production, increases, what happens to the supply of bread?
   1. A. Supply increases.
   2. B. Supply decreases.
   3. C. Supply remains constant.
   4. D. Demand increases.
7. If the government imposes a new tax on the production of cars, what is the likely effect on the supply curve for cars?
   1. A. The supply curve will shift to the right.
   2. B. The supply curve will shift to the left.
   3. C. The supply curve will not change.
   4. D. The demand curve will shift to the left.