Introduction to Microeconomics

Exercises Second Part: Demand and Supply

Demand Fundamentals
1. Joan has 20 euros a month to buy movies on the internet or to buy soft drinks. Each batch of
films costs 5 euros and each soft drink 1 euro.
a) Represent your budget constraint and write the equation.

20 R
20 = 5P + 1R
b) If you choose to watch 3 movies, how many soft drinks can you buy? R = 5
What is the opportunity cost of each film? 5 soft drinks
c) Assuming that the price of movies decreases and now costs 4 euros, draw the new budget
constraint. Has the opportunity cost of movies changed? It has gone down to 4 soft drinks

P
5
4

20 R

d) Assuming that Pp = 5 and that its income availability increases to 30 euros per month, draw
the new budget constraint. Has the opportunity cost of movies changed?
30 = 5P + 1R. The opportunity cost of the movies is still 5 soft drinks

P
6
4

20 30 R

2. A consumer has an annual income of 40,000 euros that must be divided between regular
consumption (food, transport, clothing, household expenses…) and leisure. The average price of
a regular consumer unit is 40 euros and that of a leisure unit is 10 euros.
a) Graphically represent the budget constraint
b) Represent, in the same graph, a possible curve of indifference and its optimal choice.
c) Suppose that the price of leisure increases to 20 euros, represent the new budgetary
constraint and the new optimum.
C

1000

2000 4000 O

d) Draw the leisure demand curve.

Po
20
10

20 Qo

3. We group the goods of an economy into two classes: tobacco and other goods. Because it is
known that tobacco is harmful to the health of consumers, the Public Administration establishes
a new tax on tobacco. But at the same time, because you don’t want consumers to lose well-
being because of the higher price, it compensates them so that they can continue to get their
initial satisfaction. Graphically represent the previous policy using indifference curves and
consumer budget constraint.

The initial BC is blue. With the tax, the PR becomes red; if it compensates by adding income the
BC becomes green, in the same indifference curve as at the beginning.

Others

Tobacco

4. A consumer has an income of 60 euros per month that must be distributed between coffee
and cookies. The price of a coffee is 2 euros and a portion of cookies is 4 euros.
a) Graphically represent the budget constraint. What is the opportunity cost of a coffee?
b) Represent, in the same graph, a possible indifference curve and the optimal choice.
c) Suppose your income increases to 100 euros, represent the new budget constraint and the
new optimal. Has the opportunity cost of coffee changed?

Coffee a) ½ cookie
c) No change

Cookies

5. With respect to the previous year:

a. Represent a possible utility function of the previous consumer and explains the meaning of
the slope of an indifference curve.
For example, U = G * C; the slope tells us how much coffee the consumer is willing to exchange
for a cookie so that it does not lose or gain utility.
b. Find the optimal choice graphically assuming that both the prices of coffee and cookies, and
the income are those of the initial situation and the consumer wants to purchase 6 cookies. 18
coffees

Coffee

18

6 Cookies

c. Compare the above situation with the case that the consumer's income is € 100, and cookies
are considered a normal good. Increases consumption of coffee and cookies

Coffee

18

6 Cookies

d. Deduce a possible demand curve for coffee if the income is 60 euros, the price changes to 1
€ and the consumer continues to buy 6 cookies.

Pcoffee

Qcoffee
18 36

Demand

6. State whether the following events represent: (1) a movement along the demand curve or
(2) a displacement/shift of the curve:
• The owner of an umbrella store observes that customers are more willing to buy on the day
when there is a raining forecast. (2)
• People buy more roses on St. George's Day regardless of price. (2)
• An increase in the price of petrol favors the sharing of private cars and reduces the purchase
of petrol. (1)
7. Draw the following demand curves:
• 200 units demanded at any price.

Q
200

• demand of the entire amount possible only at the price of 20 €

20

• “I buy 4000 units if the price is equal to or less than 10 euros; nothing if it's more expensive "

10

Q
4000

8. Indicate in which direction it is foreseeable that the following factors will both the individual
demand and the market demand for a given good X:
Individual Demand Market Demand
A fall in the number of consumers of good X = ←
A fall in the price of X = (no move, despite the = (no move, despite the
increase in Qd) increase in Qd)
The rise in the price of a good complementary ← ←
to good X
The rise in a consumer income → (if good X is normal → (if good X is normal
and it is this consumer’s and even if it increases
income that has for one consumer only)
increased)
A generalized expectation that the price of X → →
increase
The announcement that X is bad for the health ← ←
The announcement that X makes the → →
consumer immortal
 The announcement that good X is illegal ← ←

9. How does the market demand curve of a normal good shift if:
• Lower the price of a substitute good. ←
• The tastes of the public are directed to other goods. ←
• Decreases the price of complementary goods. →
• Increases income. → (it is a normal good)
• Complementary goods become more expensive. ←
• The price of an independent good increases. =

10. Which of the following statements is true:

• Demand for a product relates to production and price
• Demand always has a constant slope
• The demand for a product relates the quantity desired by consumers and the price
• Demand always has an infinite slope

11. The coffee demand curve has shifted to the right. The cause of this displacement can be:
• an increase in the price of tea.
• an increase in the price of sugar.
• an increase in the price of the factors needed to produce coffee.
• a decrease in the tax on coffee.

12. It is a common fact that in big cities there are traffic problems. Suppose the City Council asks
you for a study on what measures can be put in place to reduce the use of private transport in
the city. What solutions can be applied to reduce the demand for car use?
Anything that makes the use of the car more expensive (or makes it more difficult) or makes
other means of transport cheaper: price charges to enter the city, increase the price of petrol,
reduce the price of public transport, limit entry for a few days according to registrations ending
in even or odd numbers, etc.

13. Some bars charge their customers € 5 for a small bottle of water and, on the other hand,
they always make a bowl of nuts available to the customer. But if we go to the supermarket, we
will find that the price of nuts is much higher than that of water. Has the bar owner gone crazy?
Water is a complementary good to nuts, which increases thirst.

14. If the goods X and Y are complementary, in the face of an increase in the price of X:
a) the quantity demanded of X decreases and that of Y increases
b) the quantity demanded of X decreases and that of Y does not vary.
c) the demanded quantity of X decreases and the demand curve of Y goes to the left
d) the demanded quantity of X decreases and the demand curve of Y goes to the right

15. The price of tomato goes up and people buy less onions. From this evidence we can infer
that onions and tomatoes are:
a) substitutes in consumption
b) inferior goods
c) necessity goods
d) all answers are false

16. A good is normal when its demand ...:

a) increases as the price of the same good decreases
b) increases as the price of a complementary good decreases
c) increases as the price of a substitute good rises
d) all answers are false

17. Suppose chicken and fish are substitute goods. If the price of chicken increases, the demand
for fish ...:
a) it will decrease, and the fish demand curve jumps to the left
b) it will increase, and the fish demand curve jumps to the right
c) it may change, but there will only be one movement along the fish demand curve
d) all answers are false

18. What could shift the olive oil demand curve to the right?
a) a reduction in the salary of olive harvesters
b) a drop in the price of olive oil
c) a rise in the price of sunflower oil
d) all answers are false

19. The amount demanded of an inferior good:

a) increases as income decreases
b) increases when the price of a complementary good rises
c) is not affected by variations in price
d) all answers are correct

20. Since the beginning of the crisis, despite declining incomes, lottery sales have increased by
more than 20%. This means that:
a) The lottery is a luxury good
b) The lottery is a necessity good
c) The lottery is an inferior good
d) all answers are false

21. The demand curve shifts to the right if:

a) consumer income increases and the good is normal
b) the price of the good falls
c) the price of a substitute good in consumption decreases
d) all the above answers are true

22. If the price of a good increases:

a) the demand curve shifts to the left
b) the supply curve shifts to the right
c) the product is inelastic
d) all answers are false

23. In a market where two consumers are similar. If the demand function of each of them is: p
= 4 -10Q, then the market demand is:
a) p = 8 - 20Q.
b) Q = 8 - 20p
c) p = 0.8 - 0.2Q
d) p = 4 - 5Q

24. In a market where there are 10 equal consumers. If the demand function of each of them is
p = 4 - 10Q, then the market demand is:
a) p = 40-100Q.
b) Q = 40-100p
c) p = 4-0.2Q
d) p = 4-Q

25. The demand functions of good 𝑋 by two consumers are:

𝑞𝑑1𝑥 = 200 − 4𝑝 𝑥 and 𝑞𝑑2𝑥 = 100 − 𝑝 𝑥

a) Represent grafically the demand functions of each consumer and the market demand
function.
1 2 Market
P P P
100 100

50 50

200 Q1 100 Q2 300 Qmarket

b) Find the analitical expression of the market demand function.

Qm= Q1 + Q2 = (200-4P) + (100-p) = 300 -5P si P≤50
Qm= Q2 = (100-p) P>50

c) What is the demanded quantity if the price is:

1) 𝑝 𝑥 = 70. Qd = 30
2) 𝑝 𝑥 = 20. Qd = 200

Price elasticity, Income elasticity and Cross elasticity

26. Find the price elasticity of demand between the two points when the price moves from 10
to 11 and the quantity moves from 150 to 120 units.
ε = -(-30/150)/(1/10) = 2
27. Find the price elasticity of the following demand if the price is 𝑝 𝑥 =10:
𝑄𝑑 𝑥 = 300 − 3𝑝 𝑥
ε = -(-3)(10/270) = 1/9
28. Complete the following table if the demand function is: 𝑄𝑑 𝑥 = 100 − 10𝑝 𝑥
𝑄𝑑 𝑥 𝐸𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑎𝑡

𝑝𝑥 = 5 50 ε = -(-10)(5/50) = 1
𝑝𝑥 = 7 30 ε = -(-10)(7/30) = 7/3

29. The price elasticity of demand for good X is 0.5. If the price is 40 euros and we want to
reduce the consumption of good X by 30%, what should be the price variation? And what is its
final price?
ε = Variation% of Q / Variation% P → 0.5 = 30% / Variation% P → the price must go up 60%...
64 euros.

30.Which statement is true?

a) The price elasticity can only have values greater than 1
b) The price elasticity of a linear demand is always greater than 1
c) At the midpoint of a linear demand, the price elasticity is 1
d) Income elasticity is always zero for inferior goods

31. Given the demand function: 𝑄𝑑 𝑥 = 50 − 4𝑝 𝑥 , find:

• The price elasticity at the point 𝑝 𝑥 =2. ε = -(-4)/(2/42) = 4/21

• The price elasticity at the points 𝑝 𝑥 =8. ε = -(-4)/(8/18) = 16/9

• The revenue for each of the previous 4 points.
IT(si P=2) = 2*42 = 84; IT(si P=8) = 8*18 = 144
• Compare the variation in the total revenue of the two cases. Explain the results.
In the first case, the elasticity is less than 1, so when the price increases, the income increases.
In the second case, the elasticity is greater than 1, so when the price increases, the income
decreases.

32. Compare two linear and parallel demand functions. Which of the two functions is more
elastic for the same price 𝑝 𝑥 = 50?
𝑄𝑑1𝑥 = 100 − 𝑝 𝑥 and 𝑄𝑑2𝑥 = 200 − 𝑝 𝑥
The first, since P = 50 is in the middle of demand, then ε = 1, while in the second, this price is
below the midpoint of demand, then ε <1.

33. We have two linear demand functions that intersect at a point, which of the two functions
will be more elastic at that point?
𝑄𝑑1𝑥 = 100 − 𝑝 𝑥 and 𝑄𝑑1𝑥 = 200 − 4𝑝 𝑥
They intersect at the point P = 33.3 and Q = 66.6. The second, since P = 33.3 is above the
average price (25), then ε> 1, while in the first this price is below the average point of demand
(50), then ε <1.
34. If we are in an inelastic section of the demand curve, a small decrease in price will involve:
a) an increase in the total revenue of producers
b) the quantity sold will not vary
c) a decrease in the total revenue of producers
d) none of the above answers is correct

35. If for a consumer A, the income elasticity of the demand for a good is 1.5; and for another
consumer B has a value of 0.5, then we will say that the good is:
a) normal for consumer A and inferior for consumer B.
b) first necessity for consumer A and luxury for consumer B.
c) income elasticity cannot have different values for each consumer.
d) luxury for consumer A and first necessity for consumer B.

36. The demand curve for good X is Q = 10000-10px. Calculate:

a) the price that will make the elasticity of demand 0.75. P = 428.57
b) the price that will make the elasticity of demand 3. P = 750
c) the price that will maximize the revenue of the sellers. P = 500

37. Studies show that the price elasticity of tobacco demand is approximately 0.4. If a pack of
cigarettes costs € 5 and the government wants to reduce tobacco consumption by 20%, how
much will it have to raise the price? Tobacco studies have also found that young people have a
higher price elasticity than adults, what can be the explanation?
ε = Variation% of Q / Variation% P → 0.4 = 20% / Variation% P → the price must go up 50%, that
is, the pack of tobacco must cost 7.5 euros

38. Do you think it would be appropriate for basketball teams to lower the price of tickets to fill
the seats capacity of their pavilions? Will this increase their revenue? And their benefits?
Yes, if the price goes down the demand increases and they could fill the pavilions. However,
revenue may increase or decrease depending on price elasticity; if they have to reduce the price
a lot to fill the pavilion, then they will collect less revenue. The benefits depend on the revenue:
if it goes down, the profits will surely go down, but if the revenue goes up, it is not known what
will happen to the profits, because surely the costs will have gone up too.

39. Suppose that when pay-TVs increase the price of football matches, the amount demanded
for their services decreases. What could explain this?
a) demand shifts to the right
b) the demand is totally inelastic
c) the supply is elastic
d) all answers are false

40. The market demand function of good X is: 𝑄𝑑 𝑥 = 100 − 10𝑝 𝑥 + 4𝑝 𝑦 − 0,1𝑅. If the initial
prices and income are: 𝑝 𝑥 = 1; 𝑝 𝑦 = 5; 𝑅 = 100 (then Qd = 100). Calculate:
Price elasticity. ε = - (-10) (1/100) = 1/10
Cross elasticity. ε = (4) (5/100) = 1/5
Income elasticity. ε = (-0.1) (100/100) = -1/10
41. Which of the following statements are false:
a) If the demand price elasticity is 1.2, producers' revenue fall when the price rises
b) If we compare two linear and parallel demand curves, the one farthest from the origin is more
rigid at each price.
c) If the income elasticity is 1.2, the good is a necessity.
d) If the cross-elasticity between two goods x and y is 0.8, then they are complementary goods
to consumption.

42. By Market Demand Function of a good we mean ...

a) The quantities that consumers need to buy to meet their needs.
b) The quantities to be purchased at different prices, in a given period of time.
c) The degree of response of the quantity demanded to price variations.
d) The quantities consumed of a good in a given period of time.

43. Which of the following statements is correct:

a) If the demand price elasticity is negative, then the good is inferior.
b) The price elasticity of a negative sloped demand is the same at all points.
c) If demand is linear, producers’ revenue does not change when there is a price change.
d) None of the above statements is correct.

44. If theaters see their revenue decline after a campaign to discount ticket prices, a possible
explanation would be:
a) demand is elastic
b) theater is a luxury good
c) demand has jumped to the left
d) all answers are false

45. In a country, spending on wine increases as its price increases; in contrast, spending on beer
decreases when this product becomes more expensive. One explanation may be that…:
a) the two goods are complementary to each other
b) the two goods are substitutive for each other
c) the demand for wine is inelastic and that of beer elastic
d) all answers are false

Production and cost functions

46. The production function is: 𝑄 = 𝐿2 𝐾(5 − 𝐿 + 𝐾 2 ). In the short term 𝐾 = 5. Find:
A) Pt, PMe, PMg. 𝑄 = 5𝐿2 (30 − 𝐿) = (150𝐿2 − 5𝐿3 ) ; 𝑃𝑀𝑒 = 5𝐿1 (30 − 𝐿) = (150𝐿 − 5𝐿2 )
; 𝑃𝑀𝑔 = (300𝐿 − 15𝐿2 )
B) Check that when Pt is maximum, PMg is zero. True by definition. In order to find the maximum
of Pt we have to derivate (and that is the same as the PMg) and equate to zero.

47. A firm total cost function is: 𝐶𝑇 = 10𝑄 2 + 2 𝑄 + 10. Find:

a) CV i CF
𝐶𝑉 = 10𝑄 2 + 2 𝑄 ; 𝐶𝐹 = 10
b) CMg
𝐶𝑀𝑔 = 20 𝑄 + 2
c) CTMe i CVMe
10
𝐶𝑇𝑀𝑒 = 10 𝑄 + 2 + ( ) ; 𝐶𝑉𝑀𝑒 = 10 𝑄 + 2
𝑄
d) Minimum CTMe
𝑑𝐶𝑇𝑀𝑒 10
𝑑𝑄
= 10 − (𝑄2 )= 0 ; Q = 1
a) Minimum CVMe
𝑑𝐶𝑉𝑀𝑒
𝑑𝑄
= 10 ; the minimum is Q = 0
Represent in the same Picture: CTMe / CVMe / CFMe / CMg

CMg CTMe

CVMe

CFMe
2
1 Q

48. In the short term,

a) All factors of production are variable.
b) There are factors that are not variable.
c) No factor of production is variable.
d) No previous answer is correct.

49. The cost function of a firm in perfect competition is: CT = 10 𝑞 2 + 2 q + 10.

Find:
a) the supply function of the company. P = CMg → P = 20q + 2
b) the company’s short-term profit or loss if the market price is 12.
Then q = 0.5 and ∏ = 0,5 * 12 – (10 * (0,5)2 + 2*0,5 + 10) = 6 – 13,5 = - 7,5 losses

50. An industry is made up of 100 companies in perfect competition with the following cost
function each: 𝐶𝑡 = 𝑞 2 + 4𝑞 + 100. Find:
a) The firm and the industry supply.
P = CMg → P= 2q+4 , or qs = 0,5P-2 individual supply
Qs = 100 qs = 100 (0,5P-2) = 50P - 200
b) Profits or losses in the short term if the price is 10
Then qs = 3, Qs = 300
Individual profit: ∏ = 10*3 – (32 + 4*3 + 100) = 30 – 121 = - 91 losses
51. If the cost of producing two units of product is 5 euros and that of three units is 10 euros,
a) The average cost of three units of product is 10/3.
b) The marginal cost of three units of product is equal to 5 euros.
c) The marginal cost cannot be calculated.
d) (a) and (b) are correct.

52. All costs are variable in the short term.

a) False.
b) True.
c) True if there are no fixed costs.
d) (a) and (c) are correct.

Supply and price elasticity

53. A competitive industry consists of 1,000 equal firms, each with a function of CMg = 0.1q.
Determine:
a) Individual supply function
P = 0.1q, or q = 10P
b) Industry supply function
Qs = 1000 * (10P) = 10,000 P
d) If the minimum CTMe is given when the price is 10, graphically represent the profits or
losses of the company in the short term when the market price is 15.

15 CMg CTMe

10 CVMe

CFMe

Q
54. A company that is in equilibrium by producing 5 u. of product gets neither profits nor losses.
Calculate the price of this product, if the cost function of the company is:
𝐶𝑡 = 2𝑞 3 + 5𝑞 + 500
∏ = 0 if q = 5; then 5𝑃 = 2𝑞3 + 5𝑞 + 500 ; 5𝑃 = 2 ∗ 53 + 5 ∗ 5 + 500 ; P = 155

55. In a perfectly competitive market there are 100 equal firms with the following total cost
function: 𝐶𝑡 = 10 𝑞 2 + 2 𝑞 + 10. Find:
a) The supply function of the firm and the industry
P = CMg; P = 20 q + 2 individual supply; Qs = 5P - 10 market supply
b) The quantity offered if the price is P = 10. Qs = 40
c) The short-term profits or losses of the company.
∏ = 10 * 0.4 - (10 * 0.42 + 2 * 0.4 + 10) = 4 - 12.4 = -8.4 losses

56. If we have 10 companies with the same supply function,

a) The market supply is equal to the supply function of each company.
b) The market supply is 10 times the supply of each company.
c) Market supply is the sum of demand.
d) All of the above answers are false.

57. All of the following is a determinant of demand except:

a) preferences
b) technology
c) expectations
d) the price of complementary goods in consumption

58. Which of the following statements is correct?

a) those goods that have close substitutes in consumption tend to have a more elastic demand
b) supply elasticity is greater in the long run than in the short run
c) the elasticity of supply will be greater the greater the number of substitutes in production
d) all of the above answers are correct

59. The supply function of a good is: qs = 4p – 2. Represent the supply curve and say whether or
not it moves when…:
a) the workers' wages fall. Yes, right
b) the price of the good rises. No
c) a technological improvement in the production system. Yes, right
d) the price of a substitute good in production decreases. Yes, right

60. Explain how the following factors affect the supply curve of a given good X:
a) a reduction in the number of producers of X. Jump to the left
b) a increase in the taxes paid by producers. Jump to the left
c) a increase in the price of a good or service used in the production of X. Jump to the left
d) a reduction in the price of X. Do not jump
e) a subsidy to X producers. Jump to the right

61. We study the supply of computers. Which determinant of the supply function affect each of
the following?
a) massive use of robots. Technology
b) changes in workers' wages. Price of productive factors
c) changes in the costs of manufacturing computers. Price of productive factors

62. A general increase in wages will lead to inflation. True or false?

True, as production costs rise, the supply of many goods jumps to the left, raising prices.
63. The bidding function is: 𝑞𝑠 𝑥 = 2 + 4𝑝 𝑥
a) Represents the supply curve
b) Represents the following changes:
A drop in wage prices. Jump to the right
An increase in the price of good X. Does not jump
The introduction of a new production technology that affects the good X. Jumps to the right
A decrease in the price of a substitute good in production for good X. Jumps to the right

64. Find the competitive market supply and the quantity offered in equilibrium when 𝑝 𝑥 = 80,
if the market supply is composed of three groups of firms.
The first has 80 companies and each of the companies has the following supply function:
𝑝 𝑥 = 8 𝑞𝑠1𝑥 + 64
The first has 70 companies and each of the companies has the following supply function:
𝑝 𝑥 = 2 𝑞𝑠2𝑥 + 36
The first has 64 companies and each of the companies has the following supply function:
𝑝 𝑥 = 32 𝑞𝑠3𝑥 + 96
Market supply:
Qs = 0 si P < 36
Qs = 70*((P-36)/2) = 35P -1260 si 64 >P > 36
Qs = 70*((P-36)/2) + 80*((p-64)/8) = 35P -1260 + 10P – 640 = 45P – 1900 si 96 > P > 64
Qs = 70*((P-36)/2) + 80*((p-64)/8) + 64*((P-96)/32)) =45P – 1900 + 2P – 192 = 47P - 2094 si P > 96

65. Show that the supply curve:

• 𝑄𝑠 𝑥 = 10𝑝 𝑥 has unit elasticity
𝑑𝑞 𝑝 𝑝
𝜀 = ( ) ( ) = 10 ( )=1
𝑑𝑝 𝑞 10𝑝
• 𝑄𝑠 𝑥 = 100 + 10𝑝 𝑥 is inelastic.
𝑑𝑞 𝑝 𝑝
𝜀 = ( ) ( ) = 10 ( )<1
𝑑𝑝 𝑞 100 + 10𝑝

• 𝑄𝑠 𝑥 = 10𝑝 𝑥 − 200 is elastic.

𝑑𝑞 𝑝 𝑝
𝜀 = ( ) ( ) = 10 ( )>1
𝑑𝑝 𝑞 10𝑝 − 200

66. If the supply is 100 units when the price is 5 euros, 0 units when the price is lower than 5,
and infinite when the price is higher than 5,
a) The supply is completely elastic.
b) The supply is inelastic.
c) The supply is of unit elasticity.
d) No previous answer is correct.

Relationship between quantity supplied and its explaining factors

67. A technological improvement in production shifts

a) the supply curve to the right
b) the supply curve to the left
c) the demand curve to the right
d) the demand curve on the left

68. Which of the following factors causes the chestnut supply curve to shift to the right?
a) an increase in the price of coal to heat chestnuts
b) an increase in the price of a substitute consumer good such as sweet potatoes
c) a reduction in the fee charged by the council for putting a chestnut stall on the street
d) all of the above answers are true

69. A shift in the supply curve to the left may be due to:
a) a variation in consumer preferences
b) a drop in the cost of a productive factor
c) a technological improvement in the production of the good
d) no previous answer is correct.

70. When there is a technological improvement in the production of good X, the price of good
Y, which is a substitute in the production:
a) will go up
b) will go down
c) depends on income elasticity
d) no previous answer is correct.

71. Let the function Q = 4 / P. Which of the following statements is true?

a) is a demand function
b) is a supply function
c) We cannot know what kind of function it is.
d) We cannot calculate price elasticity.

72. Imagine that the price of the raw material needed in a company’s production process
increases. In this case,
a) There is a movement along the supply curve.
b) There is a jump in the supply curve to the right.
c) The supply curve jumps to the left.
d) All the above answers are correct.

73. Imagine that there is a technological improvement in the production process. In this case,
a) There is a movement along the supply curve.
b) There is a jump in the supply curve to the right.
c) The supply curve jumps to the left.
d) None of the above answers is correct.

74. Imagine that producers expect the price to go up:

a) There is a movement along the supply curve.
b) The supply curve jumps to the left.
c) The supply curve jumps to the right.
d) All of the above answers are incorrect.

75. Imagine that the number of producing companies increases by 25. In this case,
a) There is a movement along the supply curve.
b) There is a jump in the supply curve to the right.
c) Decreases the quantity offered by the market.
d) All of the above answers are incorrect.

76. If the price of a substitute good X in production falls, the supply curve of Y:
a) Move to the right.
b) Move to the left.
c) It does not move.
d) (a) and (c) are correct.

77. If the price of a complementary good in production rises,

a) The quantity supplied of this good decrease.
b) The amount supplied of this good and the complementary one goes up.
c) The quantity supplied of both goods decreases
d) All the above answers are correct.