Karteikarten
2.3: Supply
Karten in diesem Stapel (19)
- 1What is supply?Supply of a firm is the quantity of a good or service a firm is willing and able to produce and supply to the market for sale at different possible prices during a particular time period, ceteris paribus.
- 2What does the supply schedule NOT show us?It does not tell use how many products/ services the firm is actually going to supply, only shows how much they are prepared to supply.
- 3State the law of supply.The law of supply states that there is a positive causal relationship between the quantity of a good supplied and its price, over a period of time, ceteris paribus
- 4Why does the supply curve slope upward?Due to the profit motif.
-Higher prices = higher profits, therefore, incentive to produce more output - 5Define Market Supply?The sum of all individual firm's supply for a good or service.
- 6What is a vertical supply curve?It tells us that as the price increases, quantity does not increase. This can be due to the fact that there is no time/resources left to produce more of the good. E.g. Original antiques/ ticket shows
- 7What are non-price determinants of supply?Are the factors other than price that affect supply. Changes in non-price determinants causes a shift in the supply curve.
- 8State the 9 different non-price determinants of supply.-Costs of factors of production
-Technology
-Prices of competitive supply
-Prices of joint supply
-Firm expectations
-Taxes
-Subsidies
-Number of firms
-Shocks/unpredictable events - 9Describe effect of costs of factors of production on supply.If a factor of production (Land, labour capital or enterprise) costs increase, then this will be less profitable for the firm, thus causing them to produce less.
- 10Describe effect of technology on supply.New improved technological advances increases productivity and lowers the cost of production. Supply will then increase and curve will shift to the right.
- 11Describe effect of competitive supply on supply curve.Competitive supply are two or more goods that are being produced by a firm using the same resources. E.g. Wheat and corn.
If prices of wheat rise, then the firm will usually produce less corn and more wheat; thus supply curve of wheat will shift right and corn will shift left. - 12Describe effect of joint supply on the supply curve.Joint supply are two or more products that derive from a single product, so and increase in the price of one good will increase in the supply of both goods. E.g. Butter and skimmed milk.
- 13Describe how firm expectations affects supply.If firms expect price of their product to rise in the future, then the may hold some of their current supply from the market, with the expectation of being able to sell it at a higher price later on.
- 14Describe how taxes affect supply.An increase in an existing tax of one product is considered to be an increase in factor of production, thus making it less profitable for the firm. Therefore, supply will decrease and shift left.
- 15Describe how subsidies affect supply.- Subsidies are payments made to firms by the government.
- An introduction of a subsidy is represented as a decrease in factor of production, making it more profitable for firms to produce more. Supply curve will shift right. - 16Describe how number of firms affect supply.An increase in number of firms producing a particular good will cause an increase in supply
- 17Describe how unpredictable events affect supply.An unpredictable event such as the weather can cause a decrease/increase in the amount of agricultural products able to be produced. This will affect the amount of goods supplied.
- 18State three facts about this graph.- A movement along the supply curve
- Only affected by price
- Causes a change in QUANTITY supplied
- 19State three facts about this graph- Shift of supply curve
- Caused by NON price determinants of supply
- Causes a change in supply
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- International Baccalaureate Economics (Chapter 2: Competitive markets: Demand and Supply) Karteikarten am 2.3: Supply , erstellt von Jasmine Wells am 04/10/2015.
- Erstellt von
- Jasmine Wells
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