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1. Macro Econ x no > chapter 3 supply > Flashcards

chapter 3 supply Flashcards

1
Q

What is supply

A

The quantity of goods or services that producers are willing and able to sell at different prices over a certain period.

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2
Q

What are the conditions for Supply

A
  1. Resource and technology
  2. Profitability
  3. Intent
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3
Q

Describe resource and technology

A

The firm must have the necessary resources and technology.

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4
Q

Describe Profitability

A

The firm can profit from producing the good or service.

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5
Q

Describe Intent

A

The firm plans to produce and sell the good or service.

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6
Q

Explain Quantity supplied

A

The amount of goods or services that producers plan to sell at a specific price over a certain time period. It’s not necessarily the amount actually sold.

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7
Q

What is time dimension

A

Quantity supplied is always expressed with a time dimension (e.g., 1,000 cars per day).

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8
Q

What are the factors that influence supply

A
  1. Price of the good
  2. Price of Production Factors
  3. Prices of related goods
  4. expected future prices
  5. Number of suppliers
  6. Technology
  7. state of nature
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9
Q

What is meant by Price of the good

A

Primary factor considered when analyzing supply

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10
Q

What is meant by Price of production factors

A

higher input costs can reduce supply

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11
Q

What is meant by Prices of related goods

A

Substitute and complement goods affect supply

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12
Q

What is meant by expected future prices

A

anticipation of future prices can influence current supply

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13
Q

What is meant by number of suppliers

A

more suppliers typically increase supply

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14
Q

What is meant by technology

A

Technological or ingenuities advances can increase supply
Ie. figure out a cheaper way to produce something

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15
Q

What is meant by state of nature

A

natural conditions, weather, and disasters impact supply

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16
Q

What is the law of supply

A

All else being equal, an increase in the price of a good leads to an increase in the quantity supplied, and a decrease in price leads to a decrease in the quantity supplied.

17
Q

What is marginal cost and how does it affect supply

A

As production increases, the cost to produce each additional unit (marginal cost) increases. Producers will only supply more if the price covers these higher marginal costs.

18
Q

What is the supply curve

A

A graphical representation of the relationship between the price of a good and the quantity supplied.

19
Q

What is a supply schedule

A

A table that lists the quantity supplied at various prices

20
Q

Supply curve interpretation

A
  1. for a given price, it shows the quantity producer plan to sell
  2. for a given quantity, it shows the minimum price at which producers are willing to sell an additional unit (reflecting marginal cost)
21
Q

What happens when there is a change in supply

A

A shift of the supply curve due to factors other than the price of the good (e.g., technology, input prices).

22
Q

What happens when there is a change in quantity supplied

A

Movement along the supply curve due to a change in the good’s price.

23
Q

what are the factors that cause shifts in supply

A
  1. prices fo factors of production
  2. prices of related goods
  3. expected future prices
  4. number of suppliers
  5. Technology
  6. State of Nature
24
Q

Explain how Prices of factors of production causes shifts in supply

A

increase in in put prices typically reduces supply (Leftward shift)

25
Q

Explain how Prices of related goods causes shifts in supply

A

Substitute goods’ price increase can reduce supply, while complement goods’ price increase can increase supply.

26
Q

Explain how expected future prices causes shifts in supply

A

Higher future prices can reduce current supply and increase future supply.

27
Q

Explain how Number of suppliers causes shifts in supply

A

more suppliers increase supply

28
Q

Explain how Technology causes shifts in supply

A

Technological improvements increase supply (rightward shift).

29
Q

Explain how State of nature causes shifts in supply

A

Good weather increases supply, while bad weather and natural disasters decrease supply.

30
Q

Summarize supply

A

The entire relationship between price and quantity supplied, represented by the supply curve.

31
Q

Summarize Quantity supplied

A

A specific point on the supply curve, showing the quantity at a particular price.

1. Macro Econ x no (6 decks)

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