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.

The supply of a good refers to:

1

(a)

Actual production of the good

(b)

Total existing stock of the good

(c)

Stock available for sale

(d)

Amount of the good offered for sale at a particular price per unit of time.

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.

Elasticity of supply refers to the degree of responsiveness of supply of a good to changes in its:

1

(a)

Demand

(b)

Price

(c)

Cost of production

(d)

State of technology

A horizontal supply curve parallel to the quantity axis implies that the elasticity of supply is:

1

(a)

Zero

(b)

Infinite

(c)

Equal to one

(d)

Greater than zero but less than one.

If there is decrease in supply, producer moves downward along the same supply curve?

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(a) True

(b) False

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?

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(a) True

(b) False

Define supply.

1

(a)

Supply refers to the quantity of a commodity that a firm is willing and able to offer for sale, at each possible price during a given period of time.

Define market supply.

1

(a)

Market supply refers to the quantity of a commodity that all firms are willing and able to offer for sale at each possible price during a given period of time.

State any two factors affecting elasticity of supply.

1

(a)

(i) Nature of commodity;
(ii) Time period

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

1

(a)

Supply will increase

What is the shape of a supply curve?

1

(a)

Supply curve is a positively shaped upward sloping curve.