Week 6

Question 1

Supply

Answer 1

Amount of a G/S producers are willing & able to sell at a specific price and time

Question 2

Law of supply

Answer 2

In a ceteris paribus, as price of G/S rises, quantity supplied of G/S will also rise. (+ slope)

Question 3

Supply schedule

Answer 3

Table showing quantity supplied of a good producers are willing to sell at various prices

Question 4

Non-price factors affecting supply

Answer 4

Costs of production, improvements in technology, price of other goods, number of sellers, expectations of producers

Question 5

Change by price

Answer 5

Causes movement along the supply curve.
Changes the quantity supplied (expansion/contraction)

Question 6

Equilibrium

Answer 6

The price at which demand & supply meet (the market clearing price)

Question 7

Equilibrium price

Answer 7

The price, which balances the quantity of goods demanded & supplied

Question 8

Equilibrium quantity

Answer 8

The quantity of goods supplied & demanded at equilibrium price

Question 9

Surplus

Answer 9

When quantity supplied of a product exceeds quantity demanded > price above market equilibrium

To fix surplus prices, fall, which expands demand & contracts supply.

Question 10

Shortage

Answer 10

When quantity demanded of a product exceeds quantity supplied > price below market equilibrium

To fix the shortage, prices rise, which contracts demand & expands supply.