Podcast
Questions and Answers
What is the relationship defined by the Law of Supply?
What is the relationship defined by the Law of Supply?
- As quantity supplied increases, prices decrease.
- As prices decrease, quantity supplied decreases.
- As prices increase, so does quantity supplied. (correct)
- As prices increase, quantity supplied stays constant.
Which factor is held constant in a supply schedule analysis?
Which factor is held constant in a supply schedule analysis?
- Profit
- Market demand
- All other variables (correct)
- Production techniques
What does a supply curve graphically represent?
What does a supply curve graphically represent?
- The connection between profit margins and quantity supplied.
- The relationship between price and quantity supplied. (correct)
- The relationship between demand and quantity supplied.
- The impact of consumer preferences on supply.
Which of the following best explains the motive for production according to the Law of Supply?
Which of the following best explains the motive for production according to the Law of Supply?
What happens when firms enter the market, according to the Law of Supply?
What happens when firms enter the market, according to the Law of Supply?
What happens to the supply curve when there is an increase in supply?
What happens to the supply curve when there is an increase in supply?
Which factor would likely lead to a decrease in supply?
Which factor would likely lead to a decrease in supply?
How do government regulations such as excise taxes affect supply?
How do government regulations such as excise taxes affect supply?
If producers expect prices to decrease in the future, what is their likely action regarding goods?
If producers expect prices to decrease in the future, what is their likely action regarding goods?
According to the law of supply, what is the relationship between price and production?
According to the law of supply, what is the relationship between price and production?
Flashcards
Supply Curve Shift
Supply Curve Shift
A graph showing the relationship between price and quantity supplied, with shifts indicating changes in supply.
Determinants of Supply
Determinants of Supply
Factors that cause the supply curve to shift, including input costs, profit, and number of sellers.
Input Costs
Input Costs
The costs of materials needed to produce goods; falling costs increase supply and rising costs decrease it.
Law of Supply
Law of Supply
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Government Regulations
Government Regulations
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Supply
Supply
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Quantity Supplied
Quantity Supplied
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Supply Schedule
Supply Schedule
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Supply Curve
Supply Curve
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Study Notes
Supply
- Supply is the amount of goods available.
- As price increases, so does production.
- Quantity Supplied: How much of a good is supplied at a specific price.
- Firms changing production levels + firms entering and exiting the market = Law of Supply
- Profit is the motive for production.
Supply Schedule
- Compares variables that can be controlled.
- Variables = Price and Quantity Supplied
- Only considers price, not all possibilities.
- All other things are held constant, or ceteris paribus.
Market Supply Schedule
- Price of a box of Gobstoppers: -$0.50 - 100 -$1.00 - 150 -$1.50 - 200 -$2.00 - 250 -$2.50 - 300 -$3.00 - 350
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Description
This quiz covers fundamental concepts of supply in economics, including the law of supply and supply schedules. Understand how price influences quantity supplied and the implications for market dynamics. Test your knowledge on the relationship between production and profit motives.
