U1 AOS2 - Lesson 6 - NPF Influencing Supply (Movement) Flashcards
VCAA 2023 (Sample):
Question 4
An increase in the price of coffee would result in an expansion along the supply curve for coffee because
A. the wages of the coffee farmers have decreased.
B. the quantity demanded will fall as the price increases.
C. the price of fertiliser, which is needed to grow the coffee, has increased.
D. the profitability associated with coffee production has increased.
D
VCAA 2022
Question 2
A movement along the supply curve for broccoli is most likely to have been caused by
A. a shortage of skilled farm workers.
B. a decrease in the price of fertiliser.
C. a decrease in personal income tax rates.
D. the removal of the excise tax on petrol used by farmers.
Movement along supply curve means that the price has changed → caused by demand non price factor
Answer: C
VCAA 2023
Question 4b
Construct a fully labelled demand and supply diagram showing a non-price factor that will cause a leftward movement along the demand curve for new houses, resulting in a new equilibrium price and quantity.
The demand curve shifting to the left will cause a ____________ the supply curve
Contraction along
The demand curve shifting to the right will cause a ____________ to the supply curve
Expansion along
A movement from point A to point B represents a
Expansion along the supply
A movement from point B to point A represents a
Contraction along the supply curve
Which of the following events would be most likely to cause an expansion along the supply curve?
A. a decrease in the price of a good or service
B. a decrease in the levels of direct taxation
C. a decrease in the price of a substitute good or service
D. a decrease in the costs of production
B
Direct taxation refers to taxes on individuals’ incomes. A decrease in the levels of direct taxation → increase disposable income → increased willingness and ability to consume → increase deamnd (shift to right) → expansion in supply
According to the law of supply, and demand contraction along the supply curve from point B to point A is most likely to be caused by:
A. an increase in price
B. a decrease in cost of production
C. an increase in productivity
D. a decrease in disposable income
D
Shift of demand curve to the left → contraction in supply
A price ceiling being introduced below the equilibrium price will cause a ____________ the supply curve
Contraction along
A price floor being introduced above the equilibrium price will cause a ________________ the supply curve
Expansion along
True/False?
When non-price factors are constant, movements along the supply line are caused solely by changes in price.
True
Other things remaining equal, why does the supply of electricty expand as the price rises?
A. consumers pay less for the electricity they consume
B. producing a greater quantity means prices go up
C. energy providers receive more revenue for the electricity they supply
D. energy providers receive less revenue for the electricity they supply
C
What causes an expansion along the supply curve?
Increase in price, which is in turn caused by
* Non-price factors which increase demand
* Price set moving to a higher price
What causes an contraction along the supply curve?
Decreases in price, which is in turn caused by
* Non-price factors which decrease demand
* Price set moving to a lower price
If the demand curve shifts, there will be a ____________ the supply curve
Movement along
Non Price Factors that can cause a contraction along the supply curve
Factors that decrease demand
- Decrease in disposable income
- Decrease in prices of substitutes
- Increase in prices of complements
- Unfavourable tastes and preferences
- Increased interest rates
- Decreased population and demographics
- Decreased consumer confidence
Non Price Factors that can cause an expansion along the supply curve
Factors that increase demand
- Increase in disposable income
- Increase in prices of substitutes
- Decrease in prices of complements
- Fvaourable tastes and preferences
- Decreased interest rates
- Increased population and demographics
- Increased consumer confidence
