2.3 SUPPLY

Question 1

define supply

Answer 1

the number of products that a producer or seller is willing and capable to provide to buyers.

Question 2

describe the supply curve

Answer 2

an upwards sloping line/curve from left to right indicating a positive relationship between supply and price

Question 3

what will a shift left mean for supply

Answer 3

the amount producers offer for sale at every price will be less

Question 4

what will a shift right mean for supply

Answer 4

the amount producers wish to sell at every prices increases

Question 5

what is joint supply

Answer 5

the production of one good also leads to the production of another
eg. increase supply of cows for milk means increase supply of leather

Question 6

what is competitive supply

Answer 6

alternative products could be supplied with the resources available
eg. a farmer can plant potatoes OR graze cattle on their land

Question 7

what causes shifts in the supply curve

Answer 7

• changes in the cost of production
• technology improvements
• if labour productivity increases
• level of wage rates
• objectives of firms
• number of suppliers in the market