12. A shift in supply assumes _____.

• a. an exception to the law of supply
• b. that other things besides product price are constant
• c. that other things besides product price are varying
• d. that resource supplies are declining

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13. An increase in resource prices (input costs) would tend to cause an increase in the supply of the product.

• a. True
• b. False

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14. Which of these is, by definition, least likely to cause a shift in supply of a product?

• a. Production technology changes.
• b. Resource costs (input prices) change.
• c. Expected future price of the good changes.
• d. A change in the current price of the good itself.

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15. How do economists define a market equilibrium? A state of affairs where _____.

• a. Government regulations require buyers and sellers to be satisfied
• b. Scarcity is eliminated through the effects of constantly increasing supply.
• c. Buyers plans to buy and sellers plans to sell match at a particular price
• d. All hopes of buyers and sellers are satisfied

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16. Rising business inventories are a first sign of a surplus in a market.

• a. True
• b. False

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17. A surplus is defined as an excess of quantity supplied.

• a. True
• b. False

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18. A shift in supply, other things being equal, causes a shift in demand.

• a. True
• b. False

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19. A decrease in demand will lead to a lower price and a lower quantity supplied.

• a. True
• b. False

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