Podcast
Questions and Answers
What is the relationship between the price of a good and the quantity supplied, according to the law of supply?
What is the relationship between the price of a good and the quantity supplied, according to the law of supply?
- As price increases, quantity supplied increases. (correct)
- As price decreases, quantity supplied increases.
- As price increases, quantity supplied decreases.
- As price decreases, quantity supplied decreases.
What does ceteris paribus mean in the context of a supply schedule?
What does ceteris paribus mean in the context of a supply schedule?
- The supply curve is always shifting.
- All other factors are held constant. (correct)
- Prices are constantly changing.
- The quantity supplied is always increasing.
According to the market supply schedule for Gobstoppers, how many boxes would producers supply if the price was $1.50?
According to the market supply schedule for Gobstoppers, how many boxes would producers supply if the price was $1.50?
- 200 (correct)
- 100
- 150
- 250
What is the primary motive for producers to increase production levels according to the law of supply?
What is the primary motive for producers to increase production levels according to the law of supply?
What is the relationship between the supply curve and the law of supply?
What is the relationship between the supply curve and the law of supply?
What causes the demand curve to shift to the right?
What causes the demand curve to shift to the right?
What is the primary effect of the Law of Diminishing Marginal Utility on consumer behavior?
What is the primary effect of the Law of Diminishing Marginal Utility on consumer behavior?
Which of the following correctly defines the law of diminishing marginal utility?
Which of the following correctly defines the law of diminishing marginal utility?
What is the relationship between price changes and quantity demanded?
What is the relationship between price changes and quantity demanded?
Which factor is NOT necessary for there to be demand for a product?
Which factor is NOT necessary for there to be demand for a product?
What does a downward sloping demand curve indicate?
What does a downward sloping demand curve indicate?
Which factor contributes to the substitution effect?
Which factor contributes to the substitution effect?
What is the impact of falling prices on purchasing power?
What is the impact of falling prices on purchasing power?
How does a Market Demand Schedule differ from an individual Demand Schedule?
How does a Market Demand Schedule differ from an individual Demand Schedule?
What does 'Ceteris Paribus' primarily relate to in demand analysis?
What does 'Ceteris Paribus' primarily relate to in demand analysis?
Flashcards
What is Supply?
What is Supply?
The amount of goods available for sale.
Law of Supply
Law of Supply
As price increases, the production of goods also increases.
Quantity Supplied
Quantity Supplied
The specific amount of a good supplied at a particular price.
Supply Schedule
Supply Schedule
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Supply Curve
Supply Curve
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Demand Curve
Demand Curve
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Substitution Effect
Substitution Effect
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Income Effect
Income Effect
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Complementary Goods
Complementary Goods
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Shifters of Demand
Shifters of Demand
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Law of Diminishing Marginal Utility
Law of Diminishing Marginal Utility
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Demand Schedule
Demand Schedule
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Market Demand Schedule
Market Demand Schedule
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Ceteris Paribus
Ceteris Paribus
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Study Notes
Supply
- Supply is the amount of goods available
- As price increases, so does product 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: shows the relationship between the price of a good and the quantity supplied
- The schedule's variables are Price and Quantity Supplied
- It only considers price, not all possibilities
- All other things are held constant, or ceteris parabus
- Market Supply Schedules show the combined quantities supplied by all producers at different prices
- Supply Curve: a graph of the supply schedule
- Shows the relationship between price and quantity supplied
- Price is on the y-axis, and Quantity Supplied is on the x-axis
- The curve slopes upward because a higher price encourages firms to produce more of the good
- In a supply curve, as price increases quantity supplied increases.
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