SHS Economics · Year 2

Supply (Y2) practice questions

Elasticity of supply and further analysis of the factors that shape the supply of goods and services.

11 questions in this topic: 2 recall, 7 applying skills and concepts and 2 strategic thinking. Every one carries a written explanation.

Sample questions

3 of 11 questions in this topic. Sign up to answer them and see the explanations.

Question 1Strategic thinking
Fewer suppliers of a good enter a market due to new licensing restrictions, even though the price stays the same. This is best classified as
- aa change in supply, since it is caused by a non-price factor (the number of suppliers)
- ba change in quantity supplied, since price alone determines this
- ca change in demand, since consumers are affected directly
- dno economic change at all, since price hasn't moved
Question 2Skills & concepts
Why does a typical supply curve slope upward from left to right?
- aBecause producers are motivated to supply more at higher prices to maximise profit, showing a positive relationship between price and quantity supplied
- bBecause producers always supply less as prices rise
- cBecause the price axis is drawn in reverse on a supply graph
- dBecause supply curves have no relationship to price at all
Question 3Skills & concepts
If the government raises taxes on a good, what is the likely effect on the supply of that good?
- aSupply is likely to decrease, since higher taxes raise production costs and reduce profitability
- bSupply is guaranteed to increase regardless of the tax increase
- cTaxes have no effect whatsoever on a producer's supply decisions
- dOnly the price of the good changes, with no effect on the quantity supplied

Answer these and 8 more on Supply (Y2)

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Year 1 covers this ground again in Supply, with 18 questions.

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