Podcast
Questions and Answers
What resource used to make clothing came to be in short supply due to bad weather and increased demand?
What resource used to make clothing came to be in short supply due to bad weather and increased demand?
What new idea arose from the shortage portrayed in the video?
What new idea arose from the shortage portrayed in the video?
Making fabric from bamboo
According to the Law of Supply, when price goes up, quantity supplied goes up.
According to the Law of Supply, when price goes up, quantity supplied goes up.
True
When supply is elastic and has a change in quantity supplied, due to a change in price, what type of change is it?
When supply is elastic and has a change in quantity supplied, due to a change in price, what type of change is it?
Signup and view all the answers
When supply is unit elastic and has a change in quantity supplied, due to a change in price, what kind of change is it?
When supply is unit elastic and has a change in quantity supplied, due to a change in price, what kind of change is it?
Signup and view all the answers
When supply is inelastic and has a change in quantity supplied, due to a change in price, what kind of change is it?
When supply is inelastic and has a change in quantity supplied, due to a change in price, what kind of change is it?
Signup and view all the answers
According to the Law of Supply, there is a direct relationship between price and quantity supplied.
According to the Law of Supply, there is a direct relationship between price and quantity supplied.
Signup and view all the answers
Which direction does a supply curve slope?
Which direction does a supply curve slope?
Signup and view all the answers
When the price increases, the quantity supplied _______
When the price increases, the quantity supplied _______
Signup and view all the answers
What are the 5 shifters of supply?
What are the 5 shifters of supply?
Signup and view all the answers
What happens to the supply for a product when the price increases?
What happens to the supply for a product when the price increases?
Signup and view all the answers
Price changes the quantity supplied moves:
Price changes the quantity supplied moves:
Signup and view all the answers
The 5 shifters change the supply moves:
The 5 shifters change the supply moves:
Signup and view all the answers
Demand curve goes to the ____
Demand curve goes to the ____
Signup and view all the answers
Supply curve goes to the ____
Supply curve goes to the ____
Signup and view all the answers
What do you call the exact spot on the graph where quantity demanded exactly equals the quantity supplied?
What do you call the exact spot on the graph where quantity demanded exactly equals the quantity supplied?
Signup and view all the answers
What is it called when the quantity supplied is greater than the quantity demanded?
What is it called when the quantity supplied is greater than the quantity demanded?
Signup and view all the answers
What is it called when the quantity demanded is greater than the quantity supplied?
What is it called when the quantity demanded is greater than the quantity supplied?
Signup and view all the answers
Based on what you have learned from the video, when do producers want to produce the most supply?
Based on what you have learned from the video, when do producers want to produce the most supply?
Signup and view all the answers
_______________ refers to the amount of a product offered for sale at all possible prices in a market.
_______________ refers to the amount of a product offered for sale at all possible prices in a market.
Signup and view all the answers
Quantity supplied increases when the price _______________.
Quantity supplied increases when the price _______________.
Signup and view all the answers
A graph that shows the quantities supplied at each and every possible price in the _______________ is called a supply curve.
A graph that shows the quantities supplied at each and every possible price in the _______________ is called a supply curve.
Signup and view all the answers
Movement along the supply curve measures a change in _______________ supplied.
Movement along the supply curve measures a change in _______________ supplied.
Signup and view all the answers
A(n) _______________ is a payment to an individual, business, or other group to encourage or protect a certain type of economic activity.
A(n) _______________ is a payment to an individual, business, or other group to encourage or protect a certain type of economic activity.
Signup and view all the answers
Which of these results from the repeal of an item's subsidies?
Which of these results from the repeal of an item's subsidies?
Signup and view all the answers
Which of these best describes the influence of high prices on the behavior of producers?
Which of these best describes the influence of high prices on the behavior of producers?
Signup and view all the answers
Which of these names the way in which producers regard taxes?
Which of these names the way in which producers regard taxes?
Signup and view all the answers
Which of these is the best description of a normal supply curve?
Which of these is the best description of a normal supply curve?
Signup and view all the answers
Which of these is true of both an individual supply curve and a market supply curve?
Which of these is true of both an individual supply curve and a market supply curve?
Signup and view all the answers
Under what conditions do Big Oil companies decide it's the right time to develop the oil exploration leases they already have?
Under what conditions do Big Oil companies decide it's the right time to develop the oil exploration leases they already have?
Signup and view all the answers
According to the video, with gasoline prices at $4 a gallon at the pump, how has Big Oil's refusal to exploit more leases and produce more oil affected the U.S. economy and American consumers?
According to the video, with gasoline prices at $4 a gallon at the pump, how has Big Oil's refusal to exploit more leases and produce more oil affected the U.S. economy and American consumers?
Signup and view all the answers
According to the graph on Short Run Production, at which stage have too many workers been hired, and the company starts to produce less total product with a negative marginal product?
According to the graph on Short Run Production, at which stage have too many workers been hired, and the company starts to produce less total product with a negative marginal product?
Signup and view all the answers
Study Notes
Supply and Demand Basics
- Cotton faced a shortage due to severe weather and rising demand, leading to higher fabric production.
- The concept of using bamboo as an alternative fabric emerged from this resource scarcity.
Law of Supply
- Law of Supply states that as price increases, the quantity supplied also increases.
- Supply curves slope upwards, indicating a direct relationship between price and quantity supplied.
- Quantity supplied moves along the supply curve in response to price changes.
Elasticity of Supply
- Elastic supply indicates a more than proportional change in quantity supplied when prices change.
- Unit elastic supply refers to a proportional change in quantity supplied due to price alterations.
- Inelastic supply results in less than proportional changes in quantity supplied with price variations.
Supply Shifters
- The five key factors that shift supply are:
- Price of resources
- Number of producers
- Technological advances
- Taxes and subsidies
- Expectations of future prices
- Changes in these factors result in an entire shift of the supply curve rather than a movement along it.
Market Dynamics
- Equilibrium occurs at the point where quantity demanded equals quantity supplied.
- Surplus arises when supply exceeds demand, while shortage occurs when demand surpasses supply.
- High prices incentivize producers to increase supply.
Supply Representation
- Supply represents the total amount of a product available at all price points in a market.
- A supply curve graphically illustrates quantities supplied at different price levels in the market.
- A movement along the supply curve indicates a change in the quantity supplied, linked directly to price shifts.
Economic Incentives
- Subsidies are payments made to encourage specific economic activities, influencing supply.
- The removal of subsidies generally results in a leftward shift in the supply curve for affected products.
- Producers view taxes as part of their production costs, affecting decisions on supply levels.
Supply Curve Characteristics
- Both individual and market supply curves respond to price changes with alterations in quantity supplied.
- Big Oil companies tend to develop oil exploration leases when prices are significantly high to maximize revenue.
Impact on Consumers
- Increases in gasoline prices lead to decreased disposable income for consumers, negatively affecting overall economic activity.
Production Stages
- The third stage of short-run production shows diminishing returns, where employing more workers leads to a reduction in total production.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge with these flashcards covering key concepts from Economics Chapter 5. Explore topics such as supply and demand, resource management, and innovative solutions to shortages. Perfect for quick revision or deeper understanding!
