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Economics 11 > Supply > Flashcards

Supply Flashcards

1
Q

Supply is a _______ quantity

A

Desired

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2
Q

Supply of TV by Samsung is not the total available stock of the TV. What do we know from this?

A

From this, we know that this is the quantity with Samsung WILLING to bring into the market, this is not the total stock.

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3
Q

Change in price brings change in supply. True or false?

A

True

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4
Q

When a certain quantity of a commodity is being supplied by all the firms, what is it called?

A

Market supply

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5
Q

What do you mean by individual supply?

A

Quantity of a commodity, an individual firm is willing and able to offer at a given price during given period of time

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6
Q

What do you mean by supply?

A

Supply refers to the quantity of a commodity. A firm is willing and able to offer for sale during given time period at given price.

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7
Q

Is stock a part of supply or supply a part of stock?

A

Supply is part of stock, which producer is willing to bring into market for sale.

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8
Q

What do you mean by stock?

A

Total quantity of a particular commodity that is available with the firm at particular point of time

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9
Q

Stock can be less than supply. True or false?

A

False. Stock can never be less than supply.

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10
Q

Is supply a flow concept or stock?

A

Supply is a flow concept as it relates to a period of time

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11
Q

Why is stock not a flow concept?

A

Stock is not a flow concept as it relates to a PARTICULAR point of time

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12
Q

Stock is not related to price of commodity as it indicates ______

A

Fixed quantity

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13
Q

What is law of supply?

A

When price increases, supply also increases

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14
Q

Why does supply increase with increase in price?

A

This happens because, higher price means higher profit. If price is high producing more will be profitable.

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15
Q

Important point to know about increase in supply due to increase in price.

A

This is true, only if other factors remain constant

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16
Q

What are the determinants of individual supply?

A
  1. Price of commodity.
  2. Price of other goods.
  3. Price of factors of production.
  4. State of technology.
  5. Government policy( taxation, and subsidies).
  6. Objective/Goal of firm.
17
Q

If the prices of factor of production increases, what happens?

A

If the prices of factors of production increases, the cost of production also increases. This decreases the profitability. Hence, seller reduces the supply.

18
Q

How does state of technology help raise the profit margin?

A

Advanced and improved technology reduces cost of production. This raises is the profit margin.

19
Q

How do taxes lower profit margin?

A

Increase in taxes, raises cost of production, thus reduces the supply due to lower profit margin

20
Q

Do firms always supply only when price increases?

A

Generally, supply of commodity increases only with increase in price. But no not always.

21
Q

Why do firms supply even at lower prices sometimes?

A

The objective behind this is to capture larger customer base and to establish themselves as a reliable brand

22
Q

What are the determinants of market supply?

A

All the determinants of individual supply along with:
1. Number of firms in market.
2. Future expectation regarding price.
3. Means of transportation and communication.

23
Q

If the number of firm in industry increases market supply______

A

Increases

24
Q

If sellers expect rise in price in near future, then?

A

Current market supply will decrease

25
Q

Improvement in means of transportation and communication do what?

A

Help maintain adequate supply of commodity

26
Q

How is market supply curve obtained?

A

Market supply curve is obtained by horizontal summation of individual supply curves

27
Q

What is law of supply?

A

Law of supply states the direct relationship between price and quantity supplied, keeping all the factors constant

28
Q

In unit elastic supply, where does supply curve start from?

A

Origin

29
Q

In more than unit elastic supply, where does supply of start from?

A

Intercept on Y axis

30
Q

In less than unit elastic supply, what is supply curve?

A

Intercept on X axis

31
Q

In which type of supply is the supply curve parallel to X axis?

A

Perfectly elastic supply

32
Q

When a supply curve parallel to Y axis

A

In perfectly inelastic supply

Economics 11 (5 decks)

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