1.2.2 Supply

Question 1

What is supply

Answer 1

Is the amount is goods or services that producers are willing and able to sell at any given price

Question 2

What way does the supply curve go

Answer 2

/

Question 3

How does the cost of production change

Answer 3

• improvements in technology can help to reduce costs of production
• cost of production are created by the price of factor inputs
• the cost of producing goods increases it will become more expensive to supply the product this will lead to some firms reducing output
• the price the factor inputs can also be reduced making it cheaper to supple a product . There will be an increase in supply

Question 4

Technology progression has ment that firms

Answer 4

Can produce in a more efficient and cost effective manner

Improved large scale machinery allows them to spread fixed costs over greater output making the cost per unit Produced cheaper

As technology improved firms find it profitable to supply more products

Question 5

describe taxation

Answer 5

Taxation is a charge placed in individual or firms , governments use taxation to finance their spending

Question 6

Describe indirect taxes

Answer 6

Are those places on goods and services produced by individuals and firms e.g. Vat and duties

Question 7

How do indirect taxes affect supply

Answer 7

If indirect taxes are increases it becomes more expensive to produce a product , therefore the quantity supplied of that product will decrease

Question 8

Describe subsidies

Answer 8

Involves finances provided by the government to encourage supplies to produce goods and services

Question 9

How does subsidies affect supply

Answer 9

Subsides will make it cheaper to produce a product , therefore the quantity supplied of that product will increase

The withdrawal of subsidies will make it more expensive to produce a product , therefore the quantity supplied of that product will decrease

Question 10

How can external shocks effect supply

Answer 10

It can ruin stock
Not have enough workers

Eg floods
Natural disaster
Disease
Terrorist attack

Question 11

If the change in supply is caused by any factor other than price , it causes what

Answer 11

A shift in the supply curve

Question 12

An increase in the supply is shown by a shift to the

Answer 12

Right

Question 13

A decrease in supply is shown by a shift to the

Answer 13

Left