CHAPTER 11 SUPPLY

Question 1

Conditions of supply

Answer 1

Factors other than price, such as income or the price of other goods, which lead to changes in supply and are associated with shifts in the supply curve.

Question 2

Long run

Answer 2

The period of time when all factor inputs can be varied but the state of technology remains constant.

Question 3

Price elasticity of supply

Answer 3

A measure of the responsiveness of quantity supplied to a change in price. It is measured by dividing the percentage change in quantity supplied by the percentage change in price.

Question 4

Producer surplus

Answer 4

The difference between the market price which firms receive and the price at with they are prepared to supply.

Question 5

Short run

Answer 5

The period of time when at least one factor input to the production process does NOT vary. Note the textbook text says this, but the definition table in the textbook is wrong.

Question 6

Supply

Answer 6

The quantity of goods that suppliers are willing to sell at any given price over a period of time.