2.2 Supply

Question 1

supply

Answer 1

the direct relationship between the price of a good or service and the quantity of that good or service that producers are willing and able to sell over a given period of time, ceteris paribus.

Question 2

shift of supply curve

Answer 2

a change in the supply of a good or service due to non-price determinants (factors other than price), resulting in the entire supply curve moving left (decrease in supply) or right (increase in supply).

Question 3

movement along supply curve

Answer 3

a movement along the supply curve illustrates how changes in the price of a good or service influence the quantity supplied of that good or service

Question 4

quantity supplied

Answer 4

the quantity of a good or service that producers are willing and able to sell at a particular price during a given time period, ceteris paribus.

Question 5

law of supply

Answer 5

an economic law stating that an increase in the price of a good or service leads to an increase in the quantity supplied, and a decrease in price leads to a decrease in quantity supplied, ceteris paribus.

Question 6

market supply

Answer 6

the total quantity of a good or service that all producers in a market are willing and able to supply at various prices over a given time period.

Question 7

extension of quantity supplied

Answer 7

an increase in the quantity supplied of a good or service due to a rise in its price, represented by a movement up along the supply curve.

Question 8

contraction of quantity supplied

Answer 8

a decrease in the quantity supplied of a good or service due to a fall in its price, represented by a movement down along the supply curve.

Question 9

non-price determinants of supply

Answer 9

factors other than price that affect the supply of a good or service:
○ production costs
○ technology
○ taxes
○ subsidies
○ number of producers in the market

Question 10

competitive supply

Answer 10

where two or more goods can be produced using the same resources, so an increase in the supply of one good may decrease the supply of another, such as butter and margarine.

Question 11

joint supply

Answer 11

a situation where the production of one good also results in the production of another good, often seen in the case of by-products. For example, producing beef may also yield leather.

Question 12

indirect taxes

Answer 12

payments to the government (taxes) on the spending on goods and services, included in the selling price or added to the selling price.

Question 13

subsidies

Answer 13

a grant paid by the government to a firm, per unit of output, to encourage production and lower the price to consumers.