5 Questions
In a supply schedule, depicted graphically as a supply curve, what does a rise in the cost of raw materials do to the supply curve?
It shifts the supply curve to the left
In macroeconomics, what model has been used to depict how the quantity of total output and the aggregate price level may be determined in equilibrium?
Aggregate demand-aggregate supply model
In a competitive market, the unit price for a particular good will vary until it settles at a point where:
the quantity demanded will equal the quantity supplied
What determines supply in a competitive market according to the assumption of perfect competition?
$Marginal cost$
What is a supply schedule, depicted graphically as a supply curve?
$A table that shows the relationship between the price of a good and the quantity supplied by producers$
Study Notes
Supply and Demand
- A rise in the cost of raw materials shifts the supply curve to the left, indicating a decrease in supply.
Macroeconomic Models
- The Aggregate Demand-Aggregate Supply (AD-AS) model is used to depict how the quantity of total output and the aggregate price level are determined in equilibrium.
Competitive Market
- The unit price for a particular good in a competitive market will vary until it settles at a point where the quantity of the good that consumers are willing to buy (demand) equals the quantity of the good that suppliers are willing to supply (supply).
- In a competitive market, supply is determined by the assumption of perfect competition, where firms produce goods and services at the lowest possible cost.
Supply Schedule
- A supply schedule is a table that lists the quantity of a good or service that suppliers are willing to supply at different prices.
- A supply schedule can be depicted graphically as a supply curve, which shows the relationship between the price of a good and the quantity supplied.
Test your knowledge of the supply and demand model in microeconomics with this quiz. Explore the concepts of price determination, market equilibrium, and the interplay between quantity demanded and quantity supplied.
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