121 + Interview Questions in SUPPLY IN GENERAL AWARENESS Page 3 InterviewSolution

101.	Define individual supply.
Answer» The supply of a good by an individual firm/seller at a given price at a particular point of time is called individual supply.

Discussion

102.	How does future expectations about price affect the current supply of goods?
Answer» If sellers speculate price of a product to rise in future then they contract the current supply so that they can build up stock for the future and vice-versa.

Discussion

103.	What are the changes that take place in supply due to decrease in the price of a commodity?(A) Increase(B) Expansion(C) Contraction(D) Decrease
Answer» Correct option is (D) Decrease

Discussion

104.	If there is expectation about rise in price in future then present supply ________(A) Increases(B) Decreases(C) Remain constant(D) Become zero
Answer» Correct option is (B) Decreases

Discussion

105.	An increase in the price of Limca may reduce the supply of cake .
Answer» True: Increase in prices of Limca (other good of the same producer) will make its production more profitable in comparison to Coke ( given Commodity). It will lead to fall in supply of coke as coke and limca are substitute goods.

Discussion

106.	With the help of supply function `Q_(s) = - 10 + 2p`, answer the following quwstions: (i) Calculate supply at price of ₹ 7, (ii) At work price, supply will be be 0, (iii) Calculate the price at which firm will be wiling to supply 50 units.
Answer» (i) `Q_(s) = -10 + 2P`. Putting the value of price (i.e., ₹7) , we get `Q_(s) = -10 + 2 xx 7` = 4 units (ii) To ge the price at which supply will be zero, put 0 as value of supply: 0 =- 10 + 2p. It means , p ₹5. (iii) To get the price, when supply is 50 units, put 50 as value of supply: 50= - 10 + 2p. It means , p ₹ 30.

Discussion

107.	If the proportionate change in the quantity supplied of a commodity is less than the proportionate change in its price, price elasticity is greater than unity.
Answer» False: In such a case, price elasticity is less than unity.

Discussion

108.	Dissoveriers, innovation and technological development will lead to fall in supply of the given commodity.
Answer» NO, Discoveries, innovations and technological development will lead to the change in demand and wil not lead to any change in supply of a given commodity.

Discussion

109.	What is the price elasticity of supply mean ? How do we measure it ?
Answer» Price Elasticity of supply means the degree of responsiveness of supply for a commdity with reference to change in the price of such commodity. It is measured as : Price Elasticity of Supply `E_(s)) = (" Percentage change in Quantity Supplied ")/(" Percntage change in Price")`

Discussion

110.	Which types of commodities are an exception to the law of supply?
Answer» Rare goods and perishable goods.

Discussion

111.	Which of the following measure of prices elasticity shows elastic supply ? (Choose the correct alternative )
Answer» Correct Answer - D When Es>1, we say that the supply is elastic.

Discussion

112.	The following diagram shows the suppluy curve of three commodities : A , B and C . Rank their price elasticity of supply
Answer» Commodity A: Highly Elastic Supply `(E_(s) gt 1)`, Commodity B: Unitary Elastic Supply `(E_(s) =1)`, Commodity C: Less Elastic Supply `(E_(s) lt 1)`.

Discussion

113.	If the qunatity supplied does not change at all as prices change ,what will be the elasitcity of supply ?
Answer» Perfectly inelastic Supply `(E_(s) = 0)`. because there is no effect of change in price on quantity supplied.

Discussion

114.	The ratio of change in price `(DeltaP)` to original price (P) for a commodity is 0.6. If price elasticity of supply is 1.5 ,calculate the precentage change in supply .
Answer» Precentage change in Price ` =(DeltaP)/(P) xx 100 = 0.6 xx 100 = 60%` Price Elasticity of Supply `(E_(s))=("Perecentage Change in Supplied")/(" Perecntage Change in Price")` `1.5 = ("Percentage Change in Supply")/(60%)` Percentage change in supply = 90%

Discussion

115.	What is the price elasticity of supply, when: (a) Supply curve passes through the origin, (b) Supply crves is vertical straight line: (c) Supply curve is a horizontal straight line.
Answer» The price elasticity of supply in the following cases wil be (i) Unitary elastic Supply (ii) Perfectly Inelastic Supply (iii) Perfecty Elastic Supply

Discussion

116.	What is the price elasticity of supply of a commodity whose straight line supply curve passes through the origin forming an angle of `75^(@)`?
Answer» Unitary elastic `(E_(s) = 1)`because it is passing through the origin , no matter what angle it makes.

Discussion

117.	Mention one factor that causes a rightward shift in the supply curve. OR Give one reason for an increase in supply of a commodity.
Answer» Decrease in the price of inputs is one of the factors which will increase the supply of the commodity.

Discussion

118.	Explain rightward shift and leftward shift in supply curve.
Answer» Rightward shift: Keeping price facto, ^s constant, if supply increases due to any other factor, the supply curve will shift towards right which is called rightward shift in supply curve. The factors responsible for rightward shift could be fall in cost of production, fall in prices of factors of production, improvement in technology, rise in number of suppliers, government policies, etc. Leftward shift: Keeping price factor as constant, if supply decreases due to any other factor, the supply curve will shift towards left which is called leftward shift in supply curve. Leftward shift takes place when one or more above mentioned factors behaves in a reversed manner.

118.

Explain rightward shift and leftward shift in supply curve.

Answer»

Rightward shift:

Keeping price facto, ^s constant, if supply increases due to any other factor, the supply curve will shift towards right which is called rightward shift in supply curve.
The factors responsible for rightward shift could be fall in cost of production, fall in prices of factors of production, improvement in technology, rise in number of suppliers, government policies, etc.

Leftward shift:

Keeping price factor as constant, if supply decreases due to any other factor, the supply curve will shift towards left which is called leftward shift in supply curve.
Leftward shift takes place when one or more above mentioned factors behaves in a reversed manner.

Discussion

119.	A strainght line supply curve curve cuts the Y- axis in its negative range. What is the elastictiy of supply ?A. highly elasticB. Unitary elasticC. Less elasticD. Perfectly Elacstic
Answer» Correct Answer - C Staight supply curve cutting Y-axis implies that there is not happening any change in quantity supplied when price is changing, thus supply is less elastic. our answer is option (C).

Discussion

120.	Which one of the following is not a determint of Individal supply ?A. Price of the given commodityB. Taxation PolicyC. Less elasticD. Number of Firms
Answer» Correct Answer - D In case of individual supply , there is only one firm supplying the good and hence there is no way that number of firms is a determinant of individual supply.our correct option is (D).

Discussion

121.	Which one of the following is not a determinat of Individula supply ?A. Price of the commodityB. taxation policyC. state of technologyD. No. of firms
Answer» Correct Answer - D As there is only one firm supplying the good, the number of firms is not a determinant of individual supply.

Discussion

Explore topic-wise InterviewSolutions in .

Define individual supply.

How does future expectations about price affect the current supply of goods?

What are the changes that take place in supply due to decrease in the price of a commodity?(A) Increase(B) Expansion(C) Contraction(D) Decrease

If there is expectation about rise in price in future then present supply ________(A) Increases(B) Decreases(C) Remain constant(D) Become zero

An increase in the price of Limca may reduce the supply of cake .

With the help of supply function `Q_(s) = - 10 + 2p`, answer the following quwstions: (i) Calculate supply at price of ₹ 7, (ii) At work price, supply will be be 0, (iii) Calculate the price at which firm will be wiling to supply 50 units.

If the proportionate change in the quantity supplied of a commodity is less than the proportionate change in its price, price elasticity is greater than unity.

Dissoveriers, innovation and technological development will lead to fall in supply of the given commodity.

What is the price elasticity of supply mean ? How do we measure it ?

Which types of commodities are an exception to the law of supply?

Which of the following measure of prices elasticity shows elastic supply ? (Choose the correct alternative )

The following diagram shows the suppluy curve of three commodities : A , B and C . Rank their price elasticity of supply

If the qunatity supplied does not change at all as prices change ,what will be the elasitcity of supply ?

The ratio of change in price `(DeltaP)` to original price (P) for a commodity is 0.6. If price elasticity of supply is 1.5 ,calculate the precentage change in supply .

What is the price elasticity of supply, when: (a) Supply curve passes through the origin, (b) Supply crves is vertical straight line: (c) Supply curve is a horizontal straight line.

What is the price elasticity of supply of a commodity whose straight line supply curve passes through the origin forming an angle of `75^(@)`?

Mention one factor that causes a rightward shift in the supply curve. OR Give one reason for an increase in supply of a commodity.

Explain rightward shift and leftward shift in supply curve.

A strainght line supply curve curve cuts the Y- axis in its negative range. What is the elastictiy of supply ?A. highly elasticB. Unitary elasticC. Less elasticD. Perfectly Elacstic

Which one of the following is not a determint of Individal supply ?A. Price of the given commodityB. Taxation PolicyC. Less elasticD. Number of Firms

Which one of the following is not a determinat of Individula supply ?A. Price of the commodityB. taxation policyC. state of technologyD. No. of firms