Economics Questions and Answers, which are covered in this chapter, relate to the topic, Theory of Supply. Economics Questions and Answers Test contains 20 questions. Answers to Economics MCQs are available after clicking on the answer.
1.The supply of a good refers to:
(a)Actual production of goods
(b)Total stock of goods
(c)Stock available for sale
(d)Amount of goods offered for sale at a particular price per unit time
Answer
Answer: (d) Amount of goods offered for sale at a particular price per unit time
2.Increase or Decrease in Supply means:
(a)Shift in Supply curve
(b)Movement along same supply curve
(c)Both (a) and (b)
(d)Neither (a) or (b)
Answer
Answer: (A) Shift in supply curve
3.If supply curve is Perfectly Inelastic, the supply curve is:
(a)Vertical
(b)Horizontal
(c)Upward sloping
(d)Downward sloping
Answer
Answer: (a)Vertical
4.When supply price increase in the short run, the profit of the producer _____:
(a)Increases
(b)Decreases
(c)Remains constant
(d)Decreases marginally
Answer
Answer: (A) Increases
5.A change in the supply of a commodity along with same supply curve may occur due to :
(a)Change in the price of the commodity
(b)Change in the prices of related goods
(c)Change in the future, expectations about the price of the good
(d)Change in the cost of inputs
Answer
Answer: (A) Change in the price of commodity
Economics Questions and Answers – Theory of Supply
6.What is the elasticity of supply, when price changes from Rs. 15 to Rs. 12 and supply changes from 6 units to 5 units?
(a)0.77
(b)0.87
(c)0.833
(d)0.58
Answer
Answer: (c) 0.833
7.A perfectly inelastic supply curve will be
(a)Parallel to X axis
(b)Parallel to Y axis
(c)Downward sloping
(d)None of these
Answer
Answer: (b)Parallel to Y axis
8.If the supply of a commodity is perfectly elastic, an increase in demand will result in:
(a)Decrease in both price and quantity at equilibrium
(b)Increase in both price and quantity at equilibrium
(c)Increase in equilibrium quantity, equilibrium price remaining constant
(d)Increase in equilibrium price, equilibrium quantity remaining constant
Answer
Answer: (c)Increase in equilibrium quantity, equilibrium price remaining constant
9.When change in the quantity supplied is proportionate to the change in the price, the producer is said to have______:
(a)Perfectly elastic supply
(b)Relatively elastic supply
(c)Unitary elastic supply
(d)Perfectly inelastic supply
Answer
Answer: (c) Unitary elastic supply
10.Expansion in supply refers to a situation when the producers are willing to supply a :
(a)Larger quantity of the commodity at an increased price
(b)larger quantity of the commodity due to increased taxation on that commodity
(c)Larger quantity of the commodity at the same price
(d)larger quantity of the commodity at the decreased price
Answer
Answer: (A) Larger quantity of the commodity at an increased price
Economics Questions and Answers – Theory of Supply
11.Supply refers to quantity supplied at a particular price for a particular period of time:
(a)True
(b)False
(c)Partly true
(d)None
Answer
Answer: (A) True
12.When price remains constant and quantity demanded changes, then the elasticity of demand will be:
(a)Vertical to X axis
(b)Horizontal to X axis
(c)Either (a) or (b)
(d)None
Answer
Answer: (b) Horizontal to X axis
13.Increase or decrease in supply means:
(a)Change in supply due to change in its own price
(b)Change in supply due to change in factors other than its own price
(c)Both of above
(d)None of above
Answer
Answer: (b) Change in supply due to change in factors other than its own price
14.When the Supply Curve shifts to the right there is ______ in Supply.
(a)An increase
(b)Expansion
(c)Contraction
(d)Decrease.
Answer
Answer: (A) An increase
15.Elasticity of supply is defined as responsiveness of quantity supplied of a good to change in _______.
(a)Price of concerned good
(b)Price of substitute good
(c)Demand
(d)None.
Answer
Answer: (A) Price of concerned good
Economics Questions and Answers – Theory of Supply
16.The supply of the commodity implies?
(a)Total Output during a specified period
(b)Its total stock
(c)Its stock available for sale
(d)Its Quantity Offered for sale at a particular price per unit of time
Answer
Answer: (c) Its stock available for sale
17.Supply of a commodity is a _______.
(a)Stock concept
(b)Flow Concept
(c)Both stock and flow concept
(d)Wholesale concept
Answer
Answer: (b) Flow Concept
18.The price of mangoes increases from Rs. 30 per kilogram to Rs. 40 per kilogram and the supply increases from 240 kilograms the 300 kilograms. What will be the elasticity of supply for mangoes?
(a)-0.67
(b)+0.67
(c)-077
(d)+077
Answer
Answer: (d) +077
19.At a price of Rs. 25 per kg, the supply of a commodity is 10,000 kg per week. An increase in its price to Rs. 30 per kg, increases the supply of the commodity to 12,000 kg per week. The elasticity of supply will be:-
(a)0.75
(b)1.00
(c)1.50
(d)1.75
Answer
Answer: (b) 1.00
20.Short run price is also called by the name of ________.
(a)Market price
(b)Showroom price
(c)Maximum retail price
(d)None of these.
Answer
Answer: (A) Market price
4 thoughts on “Economics Questions and Answers – Chapter 2 – Theory of Supply”
Thank you very much for giving by this it could help me tommorow in my exam again thanks
Thanks it may help the students.
Many Thanks Jaydeb Ghosh
thank you very much …