Micro 8 - Supply WB Q"S NEEDED Flashcards
ADD PRACTICAL WORKBOOK QUESTIONS
Firm / Suppliers main incentive?
Profit
What does the supply curve look like?
For which 2 reasons is the supply curve upwards sloping?
- Suppliers supply more high value products to get more profit
- New businesses join the market
what does a movement along the supply curve show?
It shows how the quantity supplied responds to a change in price.
what does an extension along the supply curve represent?
An increase in quantity supplied, as a result of an increase in price.
What does a crontaction along the supply curve represent?
A decrease in quantity supplied, as a result of a decrease in price.
Why does a supply curve shift?
As a response to a change in non-price factors.
What is the result of a shift in supply?
More or less is supplied at any given price.
Define indirect taxes
Tax which is levied on goods and services.
(levied: charged)
Subsidies definition
A grant paid by the government to producers in the aim to create jobs
What 5 factors cause a shift in the supply curve?
- Costs of production
- Indirect taxes
- Subsidies
- Price of related goods
- Expectations about future prices
How does costs of production cause a shift in the supply curve?
Costs of production increase,
Profitability decreases,
Firms supply less,
Supply curve shifts left.
How does indirect taxes cause a shift in the supply curve?
Indirect taxes increase,
Cost of production increase,
Profitability decreases,
Firms supply less,
Supply curve shifts to the left
How does Subsidies cause a shift in the supply curve?
Subsidies reduce Cost of production,
Profitability increases,
Firms supply more,
Supply curve shifts right
How does Price of related goods cause a shift in the supply curve?
As Good A’s market price increases, QTY supplied will also increase
A related good may be produced using the same factors of production and it’s supply curve will shift left.
