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Micro Eco Year 1 > Supply > Flashcards

Supply Flashcards

1
Q

Define supply

A

The quantity that producers are willing and able to sell at any given price over a specific time period

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2
Q

Why does supply slope upwards

A

Because producers are willing to produce more at a higher price as they profit maximise

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3
Q

PES definition

A

A measure of the responsiveness of quantity supplied in response to a change in price

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4
Q

PES formula

A

PES = % change in quantity supplied / % change in price

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5
Q

All PES’s are _________

A

Positive

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6
Q

A PES greater than 1 is ___________

A

Elastic

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7
Q

A PES between 0 and 1 is ___________

A

Inelastic

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8
Q

A PES is greater than 1 if change in quantity supplied is __________ than change in price

A

Greater

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9
Q

Unitary elastic supply = _____ - both % change in qs and % change in price are ________

A

1

Equal

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10
Q

Factors which influence PES

A

TEASS

  1. Time period
  2. Economy
  3. Availability of factors of production
  4. Spare capacity
  5. Stockpiles
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11
Q

Lots of spare capacity = ___________

A

Elastic - More room to increase output

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12
Q

Less spare capacity = ___________

A

Inelastic - less room to increase output

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13
Q

High availability of factors of production = __________

A

Elastic

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14
Q

Low availability of factors of production = __________

A

Inelastic

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15
Q

Economy in good state = __________

A

Inelastic

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16
Q

Economy in bad state = __________

A

Elastic

17
Q

Large stockpiles = ___________

A

Elastic

18
Q

Small stockpiles = ____________

A

Inelastic

19
Q

Short run = __________

A

Inelastic

20
Q

Long run = __________

A

Elastic

21
Q

When PES = 0 - It is known as ___________ ____________

A

Perfectly inelastic supply

22
Q

What does perfectly inelastic supply mean

A

Suppliers will not respond at all to a change in price

23
Q

When PES = Infinity - it is known as ___________ ____________

A

Perfectly elastic supply

24
Q

What does perfectly elastic supply mean

A

Any fall in price will completely stop supply

25
Q

Non-price determinants of supply

A

CPNTW

  1. Costs
  2. Productivity
  3. Number of suppliers
  4. Technology
  5. Weather
26
Q

Higher costs = _______ supply

Lower costs = _______ supply

A

Higher costs = Less

Lower costs = More

27
Q

High productivity = ________ supply

Low productivity = ________ supply

A

High productivity = More supply

Low productivity = Less supply

28
Q

More suppliers = ________ supply

Fewer suppliers = _______ supply

A

More suppliers - More supply

Fewer suppliers - Less supply

29
Q

Better technology = _______ supply

A

More

30
Q

Good weather = _______ supply

A

More

Micro Eco Year 1 (8 decks)

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