Supply Flashcards
unit 1.3.2
What is Ceteris Paribus ?
other things being equal assuming other variables remain unchanged
What direction does a supply curve go ?
up
What causes movements along a supply curve ?
price changes
What can movements along a supply curve do ?
contract or extend
What is supply ?
the amount offered for sale at each given price level
What is the most important variable ?
price
When will suppliers raise output ?
if price rises as it becomes more profitable
What are the determinants for supply ?
costs of production (materials)
lack of materials
technology
taxes and subsidies
change in objectives
What is tax ?
money government takes from economic agents
What is subsidies ?
money government gives to economic agents
What does a shift inward mean ?
a decrease in supply
What does a shift outward mean ?
an increase in supply
