2.4 Supply

Question 1

Define Supply

Answer 1

The willingness of producers to supply a good or services at a given price

Question 2

Define the Law of Supply

Answer 2

An increase in price leads to a increase in supply, and a decrease in price leads to an decrease in supply

Question 3

List 3 Factors that cause shifts in supply curve

Answer 3

Changes in Cost of Production
Technological Changes
Quantity of Resources Available

Question 4

Explain how Changes in Cost of Production cause a shift in supply

Answer 4

When the cost of factors to produce the good falls, producers can produce and supply more products cheaply, causing a shift in the supply curve to the right ; vice versa

Question 5

Explain how Technological Changes cause a shift in supply

Answer 5

An introduction of new technology will increase the ability to produce more products, causing a shift to the right in the supply curve

Question 6

Explain how Quantity of Resources Available cause a shift in supply

Answer 6

If a certain product is seen to be more profitable than the one currently being produced, producers might shift to producing the more profitable product, reducing supply of the initial product