supply

Question 1

what are the 3 functions of price

Answer 1

ration, incentivise and signalling

Question 2

what do consumers do

Answer 2

ration

Question 3

what do producers do

Answer 3

incentivise

Question 4

what do entrepreneurship in other markers do

Answer 4

signalling

Question 5

define supply

Answer 5

the amount offered for sale by producers at each given price level

Question 6

what is an extension in supply caused by

Answer 6

a rise in price resulting in an increase in quantity supplied

Question 7

what is a contraction in supply caused by

Answer 7

a fall in price resulting in a decrease in quantity supplied

Question 8

explain a shift in a supply curve

Answer 8

has increased which means at the same price firms in the market are producing more

Question 9

what are some determinants of supply

Answer 9

fall in cost of raw materials
new tech
subsidies

Question 10

define joint supply

Answer 10

where an increase or decrease in supply of one good leads to an increase or decrease in supply of a by product eg beef and leather

Question 11

define PES

Answer 11

measures the responsiveness of quantity supplied to changes in price

Question 12

what does it mean when PES is greater than 1

Answer 12

price elastic in supply

Question 13

what does it mean when PES is less than one but greater then 0

Answer 13

price inelastic in supply

Question 14

what does it mean when PES is 0

Answer 14

its perfectly inelastic in supply

Question 15

what does it mean PES is infinity

Answer 15

perfectly elastic in supply

Question 16

what does it mean when PES is 1

Answer 16

unitary

Question 17

factors affecting PES

Answer 17

time
raw materials
availability of stocks
ease of switching between alternative production
availability of spare capacity

Question 18

define equilibrium

Answer 18

the price at which demand is equal to supply and there is no tendency for change

Question 19

define disequilibrium

Answer 19

the price at which the market supply does not equal demand so there is likely to be a further change or reaction by buyers or sellers

Question 20

define consumer surplus

Answer 20

the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay

Question 21

define producer surplus

Answer 21

the difference between the price producers are willing and able to supply a good or service for and the price they actually recieve

Question 22

what happens to consumer surplus is PeD is inelastic

Answer 22

consumer surplus is greater than if PeD is elastic

Question 23

what happens to PeD on producer surplus

Answer 23

PeD is not effected