economics question 244

PART A – Circle the best answer – Supply and Demand

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1.In microeconomics, the market supply curve illustrates

  1. The price at which firms will be able to sell their goods and services in a particular market.
  2. The relationship between the price of a good or service and the quantity that firms are willing to supply at each price.
  3. The amount of a good or service sold in a market during a particular time period.
  4. The historical price of goods sold in a market over time.

2. The market supply curve

  1. Will have either an upward or downward slope, depending upon price trends in the firms’ market.
  2. Slopes downward, because the higher the quantity of a good or service produced, the lower the production cost per unit.
  3. Slopes downward, because firms can sell more products and services as prices fall.
  4. Slopes upward because the higher the price, the more firms are willing and able to sell in the market.

3. Higher fuel costs would cause the supply curve for the air travel market to

  1. Remain unchanged: lower demand for air travel has hampered firms’ ability to pass on price changes.
  2. Shift up and to the left, as firms offer fewer travel services at each price.
  3. Have a steeper upward slope, as firms offer air travel services at a higher price as quantity increases.
  4. Shift down and to the right, as firms offer more travel services at each price.