Supply 3.2-1

Question 1

What is profit?

Answer 1

The difference between revenue and costs

Question 2

What is supply?

Answer 2

The amount of a good that a producer puts on the market for any time period

Question 3

What are the components, or determinants, of individual supply for a product?

Answer 3

The price of the product, the price of input goods that are used to make it, the state of the industry’s technology, government taxes and subsidies and expectations about the future market price of the good.

Question 4

What is a mathematical representation of the quantity of a good that a producer will put on the market?

Answer 4

A supply function

Question 5

When will producers want to sell the most of their product?

Answer 5

Producers will want to sell as
much of a product at the highest
possible price in order to maximize
their profits

Question 6

If there is an advance in technology what will happen to supply?

Answer 6

Supply will increase

Question 7

If there is an expectation that a price of a product will fall what will happen to the supply in the present?

Answer 7

Supply will increase

Question 8

If the price of inputs that are used to make a product increase what will happen to the supply of the original product?

Answer 8

Supply will decrease

Question 9

If the price of bread increases what will be the result in supply?

Answer 9

Supply will increase

Question 10

The quantity of a good supplied is a function of what?

Answer 10

All the variables that influence supply such as:the price of the good, the price of inputs,
technology, government taxes and subsidies and the expectation for future prices

Question 11

What is the relationship between price and quantity supplied?

Answer 11

There is a direct relationship between price and quantity supplied

Question 12

If a producer of bread thinks that the price of bread will fall next week, the producer will?

Answer 12

Sell all the bread this week if possible