TECO2113 

Principles of Microeconomics 
Practice Questions 
Extracted from: Essential Foundations of Economics, 8e (Bade) 
Demand Analysis ‐ Supply 
 
1) To be part of the supply for a good, a producer must be .

A) only able to supply the good.

B) only willing to supply the good.
C) both able and willing to supply the good.
D) both able and willing to supply the good, and have already identified a buyer.
E) both able and willing to supply the good, and have already sold the good.

2) The law of supply states that, other things remaining the same, .

A) demand increases when supply increases.

B) if the price of a good increases, firms buy less of it.
C) if the price of a good increases, the quantity supplied increases.
D) as people's income increase, the supply of goods increases.
E) if the price of a good increases, the supply increases.

3) The law of supply reflects the fact that .

A) people buy more of a good when its price falls.

B) suppliers have an incentive to use their resources in the way that brings the biggest
return.
C) higher prices are more attractive to consumers because they signal a higher quality
product.
D) businesses can sell more goods at lower prices.

4) Which of the following results in a movement upward along the supply curve for movies in
theaters?

A) an increase in the price of movie tickets

B) a decrease in the price of movie tickets
C) a decrease in the price of downloaded movies
D) a decrease in movie star salaries
E) an increase in the number of theaters

5) If the price of iPods decreases, .

A) there will be a movement down along the supply curve for iPods.
B) there will be a rightward shift in the iPod supply curve.
C) there will be a movement up along the supply curve for iPods.
D) the supply curve for iPods shifts leftward.
6) Which of the following increases the quantity supplied of yoga pants but does NOT
increase the supply of yoga pants?

A) a decrease in the price of a yoga pants

B) an increase in the price of a yoga pants
C) a decrease in the number of suppliers of yoga pants
D) an increase in the price of the resources used to produce yoga pants
E) new technology that lowers the cost of producing yoga pants

7) A decrease in the price of a complement in production leads to .

A) a decrease in the supply of the good in question.

B) an increase in the supply of the good in question.
C) no change in the supply of the good in question.
D) a decrease in the quantity supplied of the good in question.

8) Milk can be used to produce cheese or butter. If the price of a pound of butter rises, what
happens to the supply of cheese?

A) The supply of cheese increases.

B) The supply of cheese decreases.
C) The supply of cheese stays the same, and there is no change in the quantity supplied of
cheese.
D) The supply of cheese stays the same, and there is a decrease in the quantity supplied of
cheese.

9) If the number of companies producing memory chips increases, then the

.

A) supply of memory chips does not change.

B) supply of memory chips increases.
C) supply of memory chips decreases.
D) demand for memory chips increases.

10) If the number of sellers decreases, then the supply curve ________ and the supply
________.

A) shifts rightward; increases

B) shifts rightward; decreases
C) shifts leftward; increases
D) shifts leftward; decreases
E) does not shift; does not change, but there is a decrease in the quantity supplied

11) Suppose over the next several years the productivity of firms producing electric cars
improves dramatically. The advance in productivity leads to .

A) a decrease in the supply of electric cars, thus the supply curve shifts leftward.
B) a decrease in the supply of electric cars, thus the supply curve shifts rightward.
C) an increase in the supply of electric cars, thus the supply curve shifts leftward.
D) an increase in the supply electric cars, thus the supply curve shifts rightward.
E) no change in the supply of electric cars, only a change in the quantity supplied of electric
cars.
12) In the above figure, the movement from point a to point b reflects .

A) an increase in the price of pizza.

B) an increase in the supply of pizza.
C) an increase in the number of producers of pizza.
D) a decrease in the cost of the tomato sauce used to produce pizza.
E) a decrease in income if pizza is a normal good.

13) In the above figure, the shift in the supply curve from S to S1 reflects .

A) an increase in the quantity of pizza supplied.

B) a decrease in the quantity of pizza supplied.
C) an increase in the supply of pizza.
D) a decrease in the supply of pizza.
E) None of the above answers is correct.

14) In the above figure, the shift in the supply curve from S to S2 might reflect .

A) a decrease in the cost of the tomato sauce used to produce pizza.

B) a decrease in the number of pizza producers.
C) an increase in the price of a pizza.
D) an increase in income if pizza is a normal good.
E) an increase in the price of a good that is a substitute for consumers.
15) The figure shows the market for tires. The effect of an increase in the price of rubber can
be shown as a .

A) shift from S1 to S0 due to a change in supply.

B) change from point A to point B.
C) shift from S0 to S1 due to a change in supply.
D) change from point B to point A.
E) change from point B to point C due to a change in the quantity supplied.

16) Based on the supply curve above, what is the supply equation at S0?

A) 𝑄 10 0.5𝑃
B) 𝑄 10 0.5𝑃
C) 𝑄 15 0.5𝑃
D) 𝑄 15 0.5𝑃

17) The quantity supplied of a good is .

A) the same thing as the quantity demanded at each price.

B) the amount that the people are willing and able to sell during a given time period at a
specified price.
C) equal to the difference between the quantity available and the quantity desired by all
consumers and producers.
D) the amount the firm will sell when it can sell all it wants.
E) always larger than the quantity demanded at each price.
18) The graph illustrates the supply of sweaters. Which of the following events will increase
the quantity supplied of sweaters?

A) a rise in the price of a sweater

B) a rise in the wage rate paid to the workers who make sweaters
C) a rise in the expected future price of a sweater
D) an increase in the number of sellers of sweaters
E) a decrease in the number of sweater buyers

19) Suppose the price of leather used to produce shoes increases. The higher price of
leather, ________ the supply of shoes and the supply curve of shoes ________.

A) increases; shifts rightward

B) increases; shifts leftward
C) decreases; shifts rightward
D) decreases; shifts leftward

20) The graph illustrates the supply of soda. If the price of soda rises from $0.50 a can to
$1.50 a can, the quantity of soda supplied .

A) increases from 0 cans to 4,000 cans a day.

B) decreases from 4,000 cans to 0 cans a day.
C) remains unchanged because the supply increases not the quantity supplied.
D) increases from 0 to 6,000 cans a day.
The table below shows the three firms that are suppliers in the frozen yogurt market.

Price Quantity supplied

($ per serving) (servings supplied)
Yoyo FunFro Yummy
8.00 300 300 400
7.00 150 200 300
6.00 0 100 200

21) Based on the table above, if the price in the market is $6.00, .

A) only 2 firms supply a total of 300 servings.

B) 450 servings are supplied in the market.
C) 650 servings are supplied in the market.
D) all 3 firms supply a total of 1000 servings.

22) Based on the table above, if the price in the market is $7.00, .

A) only 2 firms supply a total of 300 servings.

B) 450 servings are supplied in the market.
C) 650 servings are supplied in the market.
D) all 3 firms supply a total of 1000 servings.

23) An increase in the productivity of producing jeans results in .

A) the quantity of jeans supplied increasing.

B) the supply of jeans increasing.
C) buyers demanding more jeans because they are now more efficiently produced.
D) buyers demanding fewer jeans because their price will fall, which signals lower quality.

24) If the costs of producing pizza increase, which will occur?

A) The supply of pizza will decrease.

B) The quantity of pizzas supplied will increase as sellers try to cover their costs.
C) Pizza will cease to be produced and sold.
D) The demand curve for pizza will shift leftward when the price of a pizza increases.

25) The price of salsa rises. How does the increase in the price of salsa affect the supply of
salsa?

A) The supply of salsa increases.

B) The supply of salsa decreases.
C) The quantity of salsa supplied increases.
D) The quantity of salsa supplied decreases.
Practice Question Answers
Extracted from: Essential Foundations of Economics, 8e (Bade)

1. C 6. B 11. D 16. A 21. A

2. C 7. A 12. A 17. B 22. C
3. B 8. B 13. D 18. A 23. B
4. A 9. B 14. A 19. D 24. A
5. A 10. D 15. C 20. A 25. C