Supply Flashcards

1
Q

Define “supply”.

A

Supply is the quantity of a commodity (good or service) that will be provided at alternative prices during a specified time.

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2
Q

Describe the principle of increasing cost.

A

Production costs increase in the short-run as the quantity produced increases, because new resources are not used as efficiently as the resources used previously .

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3
Q

What is the slope of a normal supply curve?

A

A normal supply curve has a positive slope: at a higher price, a greater the quantity will be supplied.

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4
Q

What are the variables that change aggregate supply?

A

Number of providers;
Cost of inputs;
Government taxation or subsidization;
Technological advances.

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5
Q

Define “market supply schedule”.

A

A schedule that shows the quantity of a commodity that will be supplied by all providers in the market at various prices during a specified time.

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6
Q

Distinguish between a change in quantity supplied and a change in supply.

A

A change in quantity supplied is movement along a given supply curve as a result of change in price only. A change in supply is a shift of a supply curve as a result of changes in variables other than price.

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7
Q

Define an “individual supply schedule”.

A

A schedule that shows the quantity of goods that an individual producer is willing to provide (supply) at various prices during a specified time.

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