MULTIPLE CHOICE QUESTIONS

1. The law of supply states that as the market price increases

a. the quantity supplied increases

b. the quantity supplied decreases

c. the supply increases

d. the supply decreases

2. As more firms exit the market

a. the market supply increases (shifts to the right)

b. the market supply increases (shifts to the left)

c. the market supply decreases (shifts to the left)

d. the market supply decreases (shifts to the right)

3. Refer to Figure 4.14.An increase in the price of mushrooms (an input for Gardenburgers) will cause a movement/shift from point B on supply curve S2to

a. supply curve S3.

b. supply curve S1.

c. point A on supply curve S2.

d. point C on supply curve S2.

Price A B 0 Number of gardenburgers Q Figure 4.14$. 700 S 600 Price 500 400 - - - D Number of apartments C Figure 5.2