1.2.2 Supply Flashcards
What does Supply mean?
Supply is the amount of a good or service that producers are willing and able to sell at any given price
What are producers?
Producers are those people that create and supply goods and services to a market
As price falls quantity supplied _______?
As price falls quantity supplied decreases
As price rises quantity supplied _______?
As price rises quantity supplied increases
What are factors affecting change in supply?
changes in the costs of production introduction of new technology indirect taxes government subsidies external shocks
What are Costs of production?
Costs of production are created by the price of factor inputs i.e. the factors of production
Improvements in technology can _______________?
help to reduce costs of production
What is Taxation?
Taxation is a charge placed on individuals or firms; governments use taxation to finance their spending
What are indirect Taxes?
Indirect taxes are those placed on goods and services produced by individuals and firms
If indirect taxes are increased it becomes ____ expensive to produce a product?
More
What are Subsidies?
Subsidies are finance provided by the government to encourage suppliers to produce goods and services
Subsidies 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
External shocks are?
unexpected events that are outside of the businesses control but have a direct impact on the level of supply
Price is the only element to cause a movement ____?
Along the curve
