A vertical supply curve parallel to Y-axis implies that the elasticity of supply is:

1

(a)

Zero

(b)

Infinity

(c)

Equal to one

(d)

Greater than zero but less than infinity.

An increase in the supply of a good is caused by:

1

(a)

Improvements in its technology

(b)

Fall in the prices of other goods

(c)

Fall in the prices of factors of production.

(d)

All of them.

The quantity supplied of a piece of goods or service is the amount that

1

(a)

is actually bought during a given time period at a given price

(b)

producers wish that they could sell that at a higher price

(c)

producers plan to sell during a given time period at a given price.

(d)

people are willing to buy during a given time period at a given price

Elasticity of supply is measured by dividing the percentage change in quantity supplied of a good by ____________

1

(a)

percentage change in income

(b)

percentage change in quantity demanded of good

(c)

percentage change in price

(d)

percentage change in taste and preference

If the quantity supplied is exactly equal to the relative change in price then the elasticity of supply is   

1

(a)

less than one

(b)

greater than one

(c)

one

(d)

none of them

If there is increase in quantity supplied, supply curve shifts rightwards?

1

(a) True

(b) False

Ceteris paribus, if price rises, quantity supply of goods will fall

1

(a) True

(b) False

When price of factor input falls, supply curve shifts rightward.

1

(a) False

(b) True

When government imposes more unit tax, supply of the concerned good increases?

1

(a) True

(b) False

If there is an improvement in technology of producing a good,supply decreases

1

(a) True

(b) False

What effect does an decrease in input price has on the supply of the commodity?

3

(a)

Supply will increase

What is the shape of a supply curve?

3

(a)

Supply curve is a positively shaped upward sloping curve.

State the law of supply.

3

(a)

It states that price of the commodity and quantity supplied are positively related to each other when other factors remain constant (ceteris paribus).

What causes a movement along the supply curve of a good?

3

(a)

Change (increase or decrease) in price causes a movement along the supply curve.

What causes a downward movement along a supply curve?

3

(a)

Fall in price and fall in quantity supplied, i.e., contraction in supply.

How does an increase in price of an input affect the supply curve of a firm?

5

(a)

PES of a commodity is 5. A producer sells 500 units of a good at a price of  Rs. 5 per unit. How much wil be willing to sell at the price of Rs.6 per unit?

5

(a)

The price elasticity of supply of commodity X and Y are equal. The price of X falls from Rs.10 to Rs.8 per unit and its quantity supplied falls by 16 per cent. The price of Y rises by 10 per cent. Calculate the percentage increase in its supply.

5

(a)

As a result of fall in price of the commodity by 10%, the quantity supplied also falls 15%. Comment on PES.

5

(a)

Distinguish between change in quantity supplied and change in supply. Use diagram.

5

(a)