Supply: Individual Supply, Market Supply, Supply Shifts, Supply Extensions/Contractions

1. Supply means

A the quantity consumers are willing and able to buy
B the quantity producers are willing and able to sell at different prices
C the total amount demanded at one price
D the amount of goods imported by government

2. A rise in the price of a good causes producers to supply more of it. What is this called?

A an extension in supply
B a contraction in supply
C an increase in supply
D a decrease in supply

3. A fall in the price of a good causes producers to supply less of it. What is this called?

A an extension in supply
B a contraction in supply
C an increase in supply
D a rightward shift of supply

4. Which change causes movement along the supply curve?

A change in production costs
B change in technology
C change in the good’s own price
D change in number of firms

5. Which change causes the supply curve to shift right?

A increase in wages of workers
B improvement in technology
C increase in tax on producers
D fall in number of firms

6. Which change causes the supply curve to shift left?

A fall in raw material costs
B increase in productivity
C increase in production costs
D subsidy given to producers

7. Market supply is found by

A adding individual firms’ supply at each price
B adding consumer demand at each price
C multiplying price by demand
D subtracting demand from supply

8. At $10, firm A supplies 40 units and firm B supplies 60 units. What is market supply if they are the only firms?

A 20 units
B 40 units
C 60 units
D 100 units

9. Which is most likely to increase supply of wheat?

A poor weather damaging crops
B higher tax on wheat farmers
C better fertiliser improving yields
D fall in number of wheat farms

10. Which is most likely to reduce supply of coffee?

A better harvesting machines
B rise in wages of coffee workers
C government subsidy for coffee farmers
D fall in cost of fertiliser

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

11. Which factor would not usually shift the supply curve?

A production costs
B technology
C price of the good itself
D indirect tax on producers

12. A supply curve slopes upward mainly because

A consumers buy more at lower prices
B producers are willing to supply more at higher prices
C production costs always fall as output rises
D demand rises when price rises

13. A government gives a subsidy to producers of solar panels. What happens to supply?

A supply shifts right
B supply shifts left
C quantity supplied contracts
D demand shifts left

14. A government places an indirect tax on producers of cigarettes. What happens to supply?

A supply shifts right
B supply shifts left
C quantity supplied extends
D demand shifts right

15. A rise in the price of a good, with other factors unchanged, causes

A supply to shift right
B supply to shift left
C quantity supplied to increase
D quantity supplied to decrease

16. A fall in the price of a good, with other factors unchanged, causes

A extension in supply
B contraction in supply
C increase in supply
D decrease in supply

17. Which statement is correct?

A A rise in price causes supply to increase.
B A rise in price causes quantity supplied to increase.
C A rise in price shifts the supply curve right.
D A fall in price shifts the supply curve left.

18. Which statement is correct?

A An increase in supply means more is supplied at every price.
B An increase in supply means price rises and quantity supplied rises.
C An increase in supply is always caused by higher demand.
D An increase in supply means movement up the supply curve.

19. A supply curve shifts left. Which statement is correct?

A firms supply more at every price
B firms supply less at every price
C consumers demand more at every price
D quantity supplied rises because price rises

20. A supply curve shifts right. Which statement is correct?

A firms supply more at every price
B firms supply less at every price
C demand increases at every price
D price of the good itself must have risen

21. Which situation shows an extension in supply?

A price rises and quantity supplied rises
B price falls and quantity supplied falls
C costs fall and supply rises
D tax rises and supply falls

22. Which situation shows a contraction in supply?

A price rises and quantity supplied rises
B price falls and quantity supplied falls
C subsidy rises and supply rises
D technology improves and supply rises

23. The price of oranges rises from $2 to $3. Farmers supply more oranges. What is this?

A increase in supply
B extension in supply
C decrease in supply
D contraction in supply

24. The cost of orange fertiliser falls. Farmers supply more oranges at every price. What is this?

A extension in supply
B contraction in supply
C increase in supply
D decrease in demand

25. Which would cause supply of handmade carpets to fall?

A lower wages of carpet workers
B more firms entering the industry
C higher cost of wool
D improved weaving technology

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

26. Which would increase supply of cars?

A higher steel prices
B more expensive factory rent
C more efficient production methods
D higher tax on car producers

27. Which would reduce market supply of restaurant meals?

A more restaurants opening
B lower food ingredient prices
C stricter safety regulations increasing costs
D improved kitchen technology

28. A firm supplies 80 units at $5 and 120 units at $7. This shows

A a supply schedule
B a demand schedule
C a decrease in supply
D a shortage

29. A supply schedule shows

A quantities demanded at different prices
B quantities supplied at different prices
C output produced at one price only
D total profit at different prices

30. Which is most likely to shift the supply of rice to the right?

A flood damaging rice fields
B rise in wages of rice workers
C invention of faster harvesting equipment
D increase in tax on rice producers

31. A rise in productivity of workers causes

A supply to increase
B supply to decrease
C demand to increase
D quantity supplied to contract

32. If producers expect the price of a good to rise in the future, what may happen to current supply?

A current supply may fall as firms hold back stock
B current supply must rise immediately
C current demand must fall
D market demand becomes zero

33. If producers expect the price of a good to fall in the future, what may happen to current supply?

A current supply may rise as firms sell now
B current supply must fall
C demand must shift right
D quantity demanded becomes zero

34. Which event causes a rightward shift in supply of fish?

A storm damaging fishing boats
B lower fuel cost for fishing boats
C higher tax on fish sellers
D fewer fishing firms

35. Which event causes a leftward shift in supply of bread?

A fall in flour prices
B improved ovens
C increase in wages of bakery workers
D more bakeries entering the market

36. Which is an example of individual supply?

A total rice supplied by all farms in a country
B supply of one bakery at different prices
C total demand by all consumers
D imports and exports of a country

37. Which is an example of market supply?

A supply of one farmer only
B supply of one shop only
C total supply by all producers in a market
D demand of all consumers in a market

38. Three firms supply 20, 35 and 45 units at $8. What is market supply?

A 45 units
B 55 units
C 80 units
D 100 units

39. At $4, three producers supply 5, 10 and 15 units. At $6, they supply 8, 16 and 24 units. What is market supply at $6?

A 24 units
B 30 units
C 40 units
D 48 units

40. A new firm enters the market. What happens to market supply?

A it usually shifts right
B it usually shifts left
C quantity supplied contracts
D demand shifts right

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

41. Several firms leave an industry because profits are low. What happens to market supply?

A it shifts right
B it shifts left
C quantity supplied extends
D demand increases

42. Which change affects supply directly rather than demand?

A a rise in consumer income
B a successful advertising campaign
C a rise in raw material costs
D a change in consumer tastes

43. Which change affects demand directly rather than supply?

A improvement in production technology
B fall in cost of raw materials
C rise in consumer income
D increase in indirect tax

44. A fall in production costs causes

A supply to shift right
B supply to shift left
C movement up the supply curve
D movement down the supply curve

45. A rise in production costs causes

A supply to shift right
B supply to shift left
C extension in supply
D increase in demand

46. A producer supplies more at every price after receiving financial support from government. What caused this?

A indirect tax
B subsidy
C fall in demand
D contraction in supply

47. Which situation is most likely to reduce supply but not because of cost changes?

A worse weather damages crops
B wages rise
C raw material prices rise
D tax on producers rises

48. Which situation is most likely to increase supply but not because of a price change?

A price of the good rises
B price of the good falls
C new machinery lowers production time
D consumers’ income rises

49. Which statement correctly distinguishes supply and quantity supplied?

A supply is one amount at one price; quantity supplied is the whole curve
B supply is the whole relationship between price and quantity; quantity supplied is one amount at one price
C supply means demand by producers; quantity supplied means demand by consumers
D supply only exists when price is zero

50. A rise in the price of good X causes firms to move resources away from producing good Y. What happens to supply of good Y?

A supply of Y may decrease
B supply of Y must increase
C demand for Y must increase
D quantity demanded of Y must fall

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

1. Answer: B

A wrong: this describes demand, not supply.
B correct: supply is the quantity producers are willing and able to sell at different prices.
C wrong: this is demand at one price.
D wrong: imports by government are not the definition of supply.

2. Answer: A

A correct: a rise in price causes movement up along the supply curve, called extension in supply.
B wrong: contraction occurs when price falls.
C wrong: increase in supply means a rightward shift.
D wrong: decrease in supply means a leftward shift.

3. Answer: B

A wrong: extension happens when price rises.
B correct: a fall in price causes movement down along the supply curve, called contraction in supply.
C wrong: increase in supply is a rightward shift.
D wrong: rightward shift is caused by non-price factors.

4. Answer: C

A wrong: production costs shift the supply curve.
B wrong: technology shifts the supply curve.
C correct: the good’s own price causes movement along the supply curve.
D wrong: number of firms shifts market supply.

5. Answer: B

A wrong: higher wages increase costs, shifting supply left.
B correct: better technology lowers costs/increases productivity, shifting supply right.
C wrong: tax raises costs, shifting supply left.
D wrong: fewer firms reduce market supply.

6. Answer: C

A wrong: lower raw material costs shift supply right.
B wrong: higher productivity shifts supply right.
C correct: higher costs reduce supply at every price, shifting supply left.
D wrong: subsidy lowers effective costs, shifting supply right.

7. Answer: A

A correct: market supply is the sum of individual firms’ supply at each price.
B wrong: that gives market demand, not supply.
C wrong: price × demand gives total expenditure/revenue.
D wrong: subtracting demand from supply may show surplus, not market supply.

8. Answer: D

A wrong: 20 is the difference between the two supplies.
B wrong: this is only firm A’s supply.
C wrong: this is only firm B’s supply.
D correct: market supply = 40 + 60 = 100 units.

9. Answer: C

A wrong: crop damage reduces supply.
B wrong: higher tax increases costs and reduces supply.
C correct: better fertiliser raises yield/productivity, increasing supply.
D wrong: fewer farms reduce market supply.

10. Answer: B

A wrong: better machines increase supply.
B correct: higher wages increase production costs, reducing supply.
C wrong: subsidy increases supply.
D wrong: lower fertiliser costs increase supply.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

11. Answer: C

A wrong: production costs shift supply.
B wrong: technology shifts supply.
C correct: the good’s own price causes movement along supply, not a shift.
D wrong: indirect tax shifts supply left.

12. Answer: B

A wrong: this explains the demand curve.
B correct: higher prices give producers more incentive to supply more.
C wrong: costs do not always fall as output rises.
D wrong: demand is separate from supply.

13. Answer: A

A correct: a subsidy lowers effective production costs, so supply shifts right.
B wrong: supply would shift left if costs increased.
C wrong: contraction is caused by a fall in own price.
D wrong: subsidy affects supply directly, not demand.

14. Answer: B

A wrong: tax does not increase supply.
B correct: indirect tax raises production costs, shifting supply left.
C wrong: extension is caused by a rise in price, not tax.
D wrong: tax on producers does not directly increase demand.

15. Answer: C

A wrong: own price does not shift supply.
B wrong: own price does not shift supply left.
C correct: higher price causes quantity supplied to increase.
D wrong: quantity supplied decreases when price falls.

16. Answer: B

A wrong: extension occurs when price rises.
B correct: lower price causes contraction in supply.
C wrong: increase in supply is a rightward shift.
D wrong: decrease in supply is a leftward shift.

17. Answer: B

A wrong: technically supply does not “increase”; quantity supplied increases.
B correct: a rise in price causes movement up along the supply curve.
C wrong: own price does not shift supply.
D wrong: own price fall causes movement, not a shift.

18. Answer: A

A correct: an increase in supply means more is supplied at every price.
B wrong: that describes movement along supply after price changes.
C wrong: supply can increase due to costs, technology, firms, subsidies, etc.
D wrong: movement up is extension in supply, not increase in supply.

19. Answer: B

A wrong: more at every price is a rightward shift.
B correct: a leftward shift means less is supplied at every price.
C wrong: supply shifts do not describe consumer demand.
D wrong: this confuses shift with movement along the curve.

20. Answer: A

A correct: rightward supply shift means more supplied at every price.
B wrong: less at every price is leftward shift.
C wrong: demand is a separate curve.
D wrong: own price causes movement, not shift.

21. Answer: A

A correct: price rises and quantity supplied rises is extension in supply.
B wrong: this is contraction in supply.
C wrong: costs falling shift supply right.
D wrong: tax rising shifts supply left.

22. Answer: B

A wrong: this is extension in supply.
B correct: price falls and quantity supplied falls is contraction in supply.
C wrong: subsidy causes increase in supply.
D wrong: technology improvement causes increase in supply.

23. Answer: B

A wrong: increase in supply means more supplied at every price.
B correct: higher price causing more supplied is extension in supply.
C wrong: supply has not shifted left.
D wrong: contraction happens when price falls.

24. Answer: C

A wrong: extension is caused by a rise in price.
B wrong: contraction is caused by a fall in price.
C correct: lower fertiliser cost shifts supply right, so supply increases.
D wrong: this affects supply, not demand.

25. Answer: C

A wrong: lower wages reduce costs and increase supply.
B wrong: more firms increase market supply.
C correct: higher wool cost raises production cost, reducing supply.
D wrong: better technology increases supply.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

26. Answer: C

A wrong: higher steel prices raise costs and reduce supply.
B wrong: higher rent raises costs and reduces supply.
C correct: more efficient production increases supply.
D wrong: higher tax raises costs and reduces supply.

27. Answer: C

A wrong: more restaurants increase market supply.
B wrong: lower ingredient prices increase supply.
C correct: stricter regulations that raise costs reduce supply.
D wrong: better kitchen technology increases supply.

28. Answer: A

A correct: quantities supplied at different prices form a supply schedule.
B wrong: a demand schedule shows quantities demanded.
C wrong: supply has not shifted; only price-quantity pairs are given.
D wrong: shortage requires demand greater than supply.

29. Answer: B

A wrong: that is a demand schedule.
B correct: a supply schedule shows quantities supplied at different prices.
C wrong: a schedule contains more than one price usually.
D wrong: profit is not the supply schedule.

30. Answer: C

A wrong: floods damage output and reduce supply.
B wrong: higher wages increase costs and reduce supply.
C correct: faster harvesting raises productivity, increasing supply.
D wrong: higher tax reduces supply.

31. Answer: A

A correct: higher productivity means more output can be supplied at each price.
B wrong: productivity rise does not decrease supply.
C wrong: demand is not directly affected.
D wrong: contraction is caused by a fall in price.

32. Answer: A

A correct: firms may hold back stock now to sell later at a higher expected price.
B wrong: current supply does not have to rise.
C wrong: expectations of producers affect supply, not current demand directly.
D wrong: demand does not become zero.

33. Answer: A

A correct: firms may sell more now before price falls, increasing current supply.
B wrong: current supply does not have to fall.
C wrong: this is a supply-side expectation.
D wrong: quantity demanded does not become zero.

34. Answer: B

A wrong: damaged boats reduce supply.
B correct: lower fuel costs reduce production costs, increasing supply.
C wrong: higher tax reduces supply.
D wrong: fewer firms reduce market supply.

35. Answer: C

A wrong: lower flour prices increase supply.
B wrong: improved ovens increase supply.
C correct: higher bakery wages increase costs and reduce supply.
D wrong: more bakeries increase market supply.

36. Answer: B

A wrong: total supply by all farms is market supply.
B correct: supply of one bakery at different prices is individual supply.
C wrong: that is market demand.
D wrong: imports/exports are not individual supply.

37. Answer: C

A wrong: one farmer is individual supply.
B wrong: one shop is individual supply.
C correct: market supply is total supply by all producers in a market.
D wrong: this is market demand.

38. Answer: D

A wrong: 45 is one firm’s supply.
B wrong: 55 is only 20 + 35.
C wrong: 80 is 35 + 45, missing first firm.
D correct: market supply = 20 + 35 + 45 = 100 units.

39. Answer: D

A wrong: 24 is one producer’s supply at $6.
B wrong: 30 is market supply at $4.
C wrong: 40 is not the total.
D correct: at $6, market supply = 8 + 16 + 24 = 48 units.

40. Answer: A

A correct: more firms increase market supply, shifting it right.
B wrong: firms entering do not reduce supply.
C wrong: contraction is caused by price falling.
D wrong: new firms affect supply, not demand directly.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

41. Answer: B

A wrong: leaving firms reduce supply.
B correct: fewer firms means less supplied at each price, shifting supply left.
C wrong: extension occurs when price rises.
D wrong: firm exit affects supply, not demand.

42. Answer: C

A wrong: income affects demand.
B wrong: advertising affects demand.
C correct: raw material costs affect producers’ costs and supply.
D wrong: consumer tastes affect demand.

43. Answer: C

A wrong: technology affects supply.
B wrong: raw material costs affect supply.
C correct: consumer income affects demand.
D wrong: indirect tax affects supply.

44. Answer: A

A correct: lower costs allow firms to supply more at every price.
B wrong: higher costs shift supply left.
C wrong: movement up is caused by own price rising.
D wrong: movement down is caused by own price falling.

45. Answer: B

A wrong: supply shifts right when costs fall.
B correct: higher costs reduce supply, shifting it left.
C wrong: extension is caused by a rise in own price.
D wrong: production costs affect supply, not demand.

46. Answer: B

A wrong: indirect tax raises costs and reduces supply.
B correct: subsidy is financial support that reduces effective costs and increases supply.
C wrong: fall in demand does not make producers supply more at every price.
D wrong: contraction is movement due to lower price.

47. Answer: A

A correct: worse weather reduces output/supply without being a direct cost increase.
B wrong: wages rising is a cost increase.
C wrong: raw material prices rising is a cost increase.
D wrong: producer tax is a cost increase.

48. Answer: C

A wrong: own price rise causes extension in supply, not supply increase.
B wrong: own price fall causes contraction.
C correct: new machinery improves productivity and increases supply.
D wrong: consumer income affects demand.

49. Answer: B

A wrong: this reverses the meanings.
B correct: supply is the whole relationship; quantity supplied is one amount at one price.
C wrong: supply is not demand.
D wrong: supply can exist at many prices.

50. Answer: A

A correct: if resources move from Y to X, fewer resources remain for Y, so supply of Y may fall.
B wrong: supply of Y does not have to increase.
C wrong: demand for Y is not directly affected by firms reallocating resources.
D wrong: quantity demanded of Y depends on Y’s price, not directly on X’s price.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.