MRU3.2: The Supply Curve

Q10: Which of the following correctly describes the appearance of a supply curve? - It is a horizontal line. - It is a line or curve that slopes up and to the right. - It is a vertical line. - It is a line or curve that slopes down and to the right.

A: It is a line or curve that slopes up and to the right.

Q9: The only way the quantity of supplied oil can be increased is to: - extract only from places where the cost of extraction is lower. - create a synthetic oil substitute. - employ more by extracting oil even from high extraction cost areas. - reduce the price.

A: employ more by extracting oil even from high extraction cost areas.

Q8: A supply curve shows: - how many transactions will take place at different prices. - how much buyers will want to buy at different prices. - how much sellers will supply at different prices. - how much profit sellers will earn at different prices.

A: how much sellers will supply at different prices.

Q3: A low price of oil sends the signal to oil producers that: - it is not worth it to extract oil unless they can do so at a very low cost. - the price of oil needs to increase. - demand for oil has risen. - the oil with the highest extraction costs should be sold.

A: it is not worth it to extract oil unless they can do so at a very low cost.

Q2: As the price of oil rises: - the cost of extraction for all oil producers rises. - buyers of oil will want to buy more oil. - producers of oil with low extraction costs will be driven from the market. - producers of oil with higher extraction costs will begin to enter the market because they can earn a profit.

A: producers of oil with higher extraction costs will begin to enter the market because they can earn a profit.

Q7: The supply curve demonstrates that producers respond to a lower price of a good by: - going out of business. - selling less. - trying to raise the price again. - selling more.

A: selling less.

Q5: The rightmost points on the supply curve for oil represent: - the easiest barrels of oil to extract. - the lowest-cost barrels of oil. - the highest-cost barrels of oil. - the most profitable barrels of oil.

A: the highest-cost barrels of oil.

Q1:There is: - one upward-sloping supply curve for all goods and services. - one supply curve for goods and one supply curve for services. - one downward-sloping supply curve for all goods and services. - a unique supply curve for every good or service.

A: a unique supply curve for every good or service.

Q6: The supply curve for oil slopes upward because: - oil keeps getting more expensive. - as the price rises, buyers will want less. - not all oil on earth is equally costly to extract. - the planet is running out of oil.

A: not all oil on earth is equally costly to extract.

Q4: In discussing the supply curve, economists use phrases like, "if the price rises" or "if the price falls," because: - all sellers have control over the prices at which they sell. - the supply curve shows how sellers will respond to price changes but by itself does not explain how prices are determined. - they do not believe that prices are ever stable. - they are uninterested in all of the other directions in which a price can move.

A: the supply curve shows how sellers will respond to price changes but by itself does not explain how prices are determined.