2.3-Supply Flashcards
What is supply in economics?
Supply refers to the quantity of a good or service that producers are willing and able to sell at different prices.
What is the law of supply?
The law of supply states that, all else being equal, an increase in the price of a good will lead to an increase in the quantity supplied.
True or False: Supply curves typically slope downwards.
False. Supply curves typically slope upwards.
What is a supply schedule?
A supply schedule is a table that shows the relationship between the price of a good and the quantity supplied.
What does a shift in the supply curve indicate?
A shift in the supply curve indicates a change in supply due to factors other than price.
List one factor that can cause a shift in the supply curve.
Changes in production costs.
What is meant by ‘market supply’?
Market supply is the total quantity of a good that all producers in a market are willing to sell at different prices.
Fill in the blank: The __________ effect suggests that as prices rise, producers are incentivized to increase production.
price
What is meant by ‘elasticity of supply’?
Elasticity of supply measures how responsive the quantity supplied is to a change in price.
True or False: A perfectly inelastic supply curve is vertical.
True.
What does it mean if supply is elastic?
If supply is elastic, a small change in price results in a large change in quantity supplied.
What is a ‘short-run supply curve’?
The short-run supply curve shows the quantity supplied at various prices when at least one factor of production is fixed.
What is a ‘long-run supply curve’?
The long-run supply curve reflects the quantity supplied when all factors of production can be varied.
Identify one determinant of supply.
Technology advancements.
What happens to supply if there is an increase in the price of raw materials?
Supply decreases.
What is ‘joint supply’?
Joint supply occurs when the production of one good also results in the production of another good.
What does ‘complementary supply’ refer to?
Complementary supply refers to goods that are produced together, where an increase in the supply of one good increases the supply of another.
Fill in the blank: A __________ in taxes on production will decrease supply.
rise
What is the impact of government subsidies on supply?
Government subsidies typically increase supply.
True or False: An increase in the number of suppliers will decrease market supply.
False.
What does a supply curve represent graphically?
A supply curve represents the relationship between price and quantity supplied on a graph.
How does consumer expectation affect supply?
If producers expect prices to rise in the future, they may decrease current supply to sell more later.
What is ‘market equilibrium’?
Market equilibrium is the point where the quantity supplied equals the quantity demanded.
What happens to equilibrium price if supply increases?
Equilibrium price tends to decrease.
