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Questions and Answers
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?
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 right
- It shifts the supply curve to the left (correct)
- It makes the supply curve steeper
- It causes no change in the supply curve
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?
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?
- Perfect competition model
- Oligopoly model
- Aggregate demand-aggregate supply model (correct)
- Monopolistic competition model
In a competitive market, the unit price for a particular good will vary until it settles at a point where:
In a competitive market, the unit price for a particular good will vary until it settles at a point where:
- the quantity supplied will exceed the quantity demanded
- the market reaches perfect competition
- the quantity demanded will exceed the quantity supplied
- the quantity demanded will equal the quantity supplied (correct)
What determines supply in a competitive market according to the assumption of perfect competition?
What determines supply in a competitive market according to the assumption of perfect competition?
What is a supply schedule, depicted graphically as a supply curve?
What is a supply schedule, depicted graphically as a supply curve?
Flashcards
Raw Material Cost Increase
Raw Material Cost Increase
It shifts the supply curve to the left.
Aggregate Demand-Aggregate Supply Model
Aggregate Demand-Aggregate Supply Model
A model used to depict how the quantity of total output and the aggregate price level may be determined in equilibrium
Competitive Market Equilibrium
Competitive Market Equilibrium
The quantity demanded will equal the quantity supplied.
Supply Determination in Perfect Competition
Supply Determination in Perfect Competition
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Supply Schedule/Curve
Supply Schedule/Curve
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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.
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