The Law of Supply — Quiz

Question 1

Which best describes the role the availability of resources plays when a company is considering whether to produce a certain good?

Revolt · Accepted Answer

If a resource is difficult to obtain, production costs will be high.

Question 2

The law of supply states that as the price of a good rises, the quantity supplied of that good

Revolt · Accepted Answer

increases.

Question 3

Which best explains why the law of supply operates the way it does in a free enterprise economy?

Revolt · Accepted Answer

Companies want to be as profitable as possible.

Question 4

In order to compete successfully, a producer must produce goods that are

Revolt · Accepted Answer

of a higher quality than those of competitors.

Question 5

All things being equal, when producers sell goods for a lower price, they make

Revolt · Accepted Answer

less money.

Question 6

When prices for homes rise, why might construction companies decide to build more homes?

Revolt · Accepted Answer

to make a profit

Question 7

The law of supply demonstrates the behaviors of producers when they

Revolt · Accepted Answer

supply goods to consumers.

Question 8

Which best describes what happens to the amount of a good or service that is supplied to consumers?

Revolt · Accepted Answer

The amount of a good or service can change.

The Law of Supply — Quiz Answers