Module 3 - Supply

Question 1

___ is a principle that states: as the price of a G, S, or R rises, the quantity supplied will increase and vice versa (if all else remains constant).

Answer 1

Law of Supply

Question 2

___ states that if at least one input of production is fixed, the marginal productivity of additional variable resources will eventually decrease (if all else remains constant)

Answer 2

Diminishing marginal productivity

Question 3

___ is a table representation of the relationship between the price of a G, S, or R and the quantities producers are willing and able to supply over a fixed period of time (if all else remains constant).

Answer 3

Supply schedule

Question 4

___ is a graph representation of the relationship between the price of a G, S, or R and the quantities producers are willing and able to supply over a fixed period of time (if all else remains constant).

Answer 4

Supply curve

Question 5

___ is the quantity of a G, S, or R that producers are willing and able to supply at a given price.

Answer 5

Quantity supplied
↑ price ↑ quantity supplied
↓ price ↓ quantity supplied

Question 6

What law in part explains the explanation behind the Law of Supply?

Answer 6

Law of Increasing Opportunity Cost
If all else is held constant, firms will be willing and able to produce more output only when prices rise, precisely because their opportunity cost of production is increasing.

Question 7

___ is the summation of the individual supply curves.

Answer 7

Market supply

Question 8

___ is a change in the quantity of G, S, or R supplied at every price.

Answer 8

Shift in supply
↑ supply - R shift
↓ supply - L shift

Question 9

___ is the change in quantity of G, S, or R supplied due to the change in price.

Answer 9

Movement along a (existing) supply curve

Question 10

A change in ___ shifts the supply curve L or R.

Answer 10

Non-price determinants
(Supply non-price determinants: Tax, subsidies, resources, technology, number of sellers and expectations of future prices)

Question 11

___ is a payment made by the government to a business; does not necessarily require economic acitivity.

Answer 11

Subsidy

Question 12

___ is a payment made by a business or individual to the government; the result of economic activity.

Answer 12

Tax

Question 13

↑ subsidy ___ [↑or↓] supply

Answer 13

↑

Question 14

↓ subsidy ___ [↑or↓] supply

Answer 14

↓

Question 15

↑ tax ___ [↑or↓] supply

Answer 15

↓

Question 16

↓ tax ___ [↑or↓] supply

Answer 16

↑

Question 17

Taxes and subsidies placed on consumers shift ___ curves.

Answer 17

Demand

Question 18

Taxes and subsidies placed on businesses shift ___ curves.

Answer 18

Supply

Question 19

___ focuses on price (if all else remains constant).

Answer 19

Supply

Question 20

___ focuses on what is changing - price or non-price determinants.

Answer 20

Quantity supplied

Question 21

↑ price ___ [↑or↓] quantity supplied

Answer 21

↑

More money to produce G, S, R

Question 22

↑ non-price determinants ___ [↑or↓] supply

Answer 22

↑

I.e., fertilizers

Question 23

___ are inputs used to produce G and S.

I.e., land, labor, capital, and entrepreneurial ability

Answer 23

Resources

Question 24

___ is the knowledge, inventions and innovations that can potentially increase resource productivity.
I.e., electronic radiographs and MRIs provide 24/7 diagnostics

Answer 24

Technology

Question 25

↑ resource costs ___ [↑or↓] supply

Answer 25

↓ - L shift

Question 26

↓ resource costs ___ [↑or↓] supply

Answer 26

↑ - R shift

Question 27

(+) technological changes ___ [↑or↓] supply and productivity

Answer 27

↑

Question 28

(-) technological changes ___ [↑or↓] supply and productivity

Answer 28

↓

Question 29

___ are market participants who are willing and able to sell G, S, and R.

Answer 29

Sellers

Question 30

___ are the anticipated future outcomes, including prices, that sellers associate with the production of a G, S or R.

Answer 30

Seller expectations

Question 31

___ refers to the quantity of output firms produce.

Answer 31

Production

Question 32

___ refers to the quantity of output firms are willing and able to provide to the market at different prices (if all else remains constant).

Answer 32

Supply

Question 33

↑ expected prices will ↑ production and ___ [↑or↓] current supply to markets.

Answer 33

↓

Decrease in products available to current markets due to the holding of products for future market sales

Question 34

What are the non-price determinants of supply?

Answer 34

1. Tax
2. Subsidies
3. Resources
4. Technology
5. Number of sellers
6. Expectations of future prices

Question 35

___ is the point on a supply curve at the same price (as quantity demanded).

Answer 35

Quantity supplied