1. When the price of Widgets increases, the A: Supply increases B: Quantity supp
ID: 1166632 • Letter: 1
Question
1. When the price of Widgets increases, the A: Supply increases B: Quantity supply increases C: Supply decreases D: Quantity supplied decreases E: Quantity demand increases 2. Other things being equal, an upward sloping supply curve shows, A: The quantity supplied of a good is inversely related to the price of the good B: The quantity supplied is positively related to the price of the good C: The price and quantity are inversely related D: A constant opportunity cost of production E: The value of alternative production methods 3.Prairie Zephyr is a saw mill that makes lumber. As more lumber is produced, so is more sawdust. Prairie Zephyr sells the sawdust to a firm that makes paper from sawdust. What is true about the lumber and sawdust that Prairie Zephyr produces? A: The two goods are substitutes in production B: The C: The two goods are inferior goods D: The two goods are superior goods E: The two goods are normal goods two goods are complements in production 4.Rusty's shirts are made with cotton. An increase in the price of cotton will A: Increase the supply of cotton shirts B: Decrease the supply of cotton shirts C: Represents a movement along the supply curve for cotton shirts D: Increase the quantity supplied of cotton shirts E: Not shift the supply curve for cotton shirts 5.An increase in supply is caused by A: An increase in input pricesExplanation / Answer
1) Law of supply relates price and quantity supplied in a direct relation so when price rises quantity suppplied will rise. Select B
2) As mentioned in 1), the relationship is direct so when variable increases the other rises as well. Select B
3) Because the relationship between them is direct and both are produced simultaneosly, they are complements.Select B
4) Since cotton is an input, a rise in input price will reduce supply so supply is decreased. Select B
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