AP Macroeconomics Quiz: Supply
5 questions · exam conditions
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SupplyQuestion 1 of 5

Based on the supply curve shown, the question concerns a shift of supply. The government introduces a per-unit subsidy for producers that reduces firms' effective costs. Which option best matches the shift shown in the graph?

(Use the graph to identify whether supply increased or decreased.)

Question graphic
A movement up along S1S_1 because a higher price increases quantity supplied with no shift
A leftward shift from S1S_1 to S2S_2 because a subsidy raises per-unit costs to producers
A rightward shift from S1S_1 to S2S_2 because a subsidy lowers per-unit costs to producers
A rightward shift from S1S_1 to S2S_2 because consumer preferences increase purchases
A movement down along S1S_1 because a lower price decreases quantity supplied with no shift
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AP Macroeconomics Quiz

AP Macroeconomics Quiz: Supply

Practice Supply in AP Macroeconomics with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Supply, giving you a quick way to practice the rules, question types, and explanations that matter most for AP Macroeconomics.

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

Based on the supply curve shown, the question concerns a shift of supply. The government introduces a per-unit subsidy for producers that reduces firms' effective costs. Which option best matches the shift shown in the graph?

(Use the graph to identify whether supply increased or decreased.)

  1. A movement up along S1S_1 because a higher price increases quantity supplied with no shift
  2. A leftward shift from S1S_1 to S2S_2 because a subsidy raises per-unit costs to producers
  3. A rightward shift from S1S_1 to S2S_2 because a subsidy lowers per-unit costs to producers (correct answer)
  4. A rightward shift from S1S_1 to S2S_2 because consumer preferences increase purchases
  5. A movement down along S1S_1 because a lower price decreases quantity supplied with no shift
Explanation: The supply curve illustrates the quantities firms supply at different prices, contrasting with quantity supplied at a fixed price. Shifts occur when cost determinants change, affecting supply at every price. The graph depicts a rightward shift from S1 to S2, showing increased supply with higher quantities at each price. This is explained by the subsidy lowering per-unit costs, boosting profitability and supply, as in choice C. A common misconception is treating this as a movement along the curve, but it's a shift from a cost reduction, not a price adjustment. Strategically, differentiate cost-side changes (shifts) from price changes (movements) for accurate analysis. Subsidies are a classic example of policies that shift supply rightward.

Question 2

Based on the short-run aggregate supply (SRAS) curves shown, the economy experiences a shift from SRAS1SRAS_1 to SRAS2SRAS_2. Which change in a macro-level determinant of supply is most consistent with the shift shown in the graph?

  1. A decrease in productivity that raises per-unit production costs at every output level.
  2. A decrease in the overall price level that causes producers to move to a lower quantity supplied.
  3. An improvement in technology that lowers per-unit production costs across the economy. (correct answer)
  4. An increase in household income that raises spending and encourages firms to produce more.
  5. An increase in input prices that lowers the amount firms can profitably supply at each price.
Explanation: In the graph, SRAS₂ lies to the right of SRAS₁, so more real output is supplied at every price level, which signals a change in a non-price determinant. An improvement in technology that lowers per-unit production costs across the economy is the determinant that produces this rightward shift. A common misconception is confusing this shift with a movement along the curve, but movements occur only from price changes, whereas shifts result from factors like technology. To apply this transferable strategy, identify if the change affects cost-side factors like technology or input prices, which cause shifts, versus mere price changes that cause movements along the supply curve.

Question 3

Based on the short-run aggregate supply (SRAS) curves shown, the economy experiences a shift of short-run aggregate supply. Which option best describes the shift shown in the graph and a cause consistent with it?

  1. A movement up along SRAS1SRAS_1 caused by a higher price level, raising quantity supplied
  2. A leftward shift from SRAS1SRAS_1 to SRAS2SRAS_2 caused by higher unit production costs from lower productivity
  3. A rightward shift from SRAS1SRAS_1 to SRAS2SRAS_2 caused by higher household income increasing purchases
  4. A rightward shift from SRAS1SRAS_1 to SRAS2SRAS_2 caused by higher productivity lowering per-unit costs (correct answer)
  5. A movement down along SRAS1SRAS_1 caused by a lower price level, reducing quantity supplied
Explanation: In the graph, SRAS₂ lies to the right of SRAS₁, so more real output is supplied at every price level. A rightward shift of SRAS comes from lower per-unit production costs, and higher productivity is one such cause: when each worker produces more per hour, each unit of output costs less, so more output is profitable at each price level. A common misconception is confusing this shift with a movement along the curve, but here it's a shift because the cause is a cost-side change, not a price change. To apply this transferable strategy, identify whether the change affects production costs (causing a shift) or is solely a price adjustment (causing a movement along the curve). Remember, positive technological changes like automation typically shift supply rightward in the short run by enhancing efficiency.

Question 4

Based on the supply curves shown, the economy experiences a shift of supply from S1S_1 to S2S_2 after a major hurricane destroys ports and factories, disrupting production and shipping. Which statement best matches the shift shown in the graph?

  1. A negative supply shock reduces supply at each price in the short run. (correct answer)
  2. A positive technology shock increases supply at each price in the short run.
  3. A rise in the price level causes a movement along supply to a higher quantity supplied.
  4. An increase in consumer income raises demand, shifting supply to the right.
  5. A decrease in business taxes increases supply at each price in the short run.
Explanation: Supply represents the entire curve mapping price levels to quantities produced, while quantity supplied is the specific quantity at one price on that curve. The graph shows a leftward shift from S1 to S2, reducing supply at every price due to a disruption in production capabilities. Answer A matches because a negative supply shock, like a hurricane, increases costs and decreases supply, consistent with the shift. Misconceptions arise when confusing shifts with movements; for instance, thinking a price rise causes the shift instead of a movement to higher quantity supplied. To strategize, evaluate if the change impacts cost-side factors like productivity shocks, causing shifts, versus isolated price changes that prompt movements along the supply curve.

Question 5

Based on the short-run aggregate supply (SRAS) curves shown, the economy experiences a shift of short-run aggregate supply. Which statement best describes the shift shown in the graph and a cause consistent with it?

  1. A rightward shift from SRAS1SRAS_1 to SRAS2SRAS_2 because higher wages lower production costs
  2. A leftward shift from SRAS1SRAS_1 to SRAS2SRAS_2 because higher wages raise production costs (correct answer)
  3. A movement down along SRAS1SRAS_1 because the price level falls, reducing quantity supplied
  4. A rightward shift from SRAS1SRAS_1 to SRAS2SRAS_2 because consumer demand increases at each price
  5. A movement up along SRAS1SRAS_1 because the price level rises, increasing quantity supplied
Explanation: In the graph, SRAS₂ lies to the left of SRAS₁: firms supply less real output at every price level, a decrease in short-run aggregate supply. A cause consistent with that shift is higher wages, the largest cost for most firms, raising per-unit production costs. A change in the price level or in demand would not shift SRAS. Confusion often occurs by mistaking shifts for movements, but this is a cost-driven shift, not a price change. Use the strategy of separating cost-side factors (shifts) from price adjustments (movements). Wage increases are a common cause of leftward supply shifts in macroeconomics.