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Questions and Answers
Define quantity supplied in economics.
Define quantity supplied in economics.
The amount of a good or service that sellers are willing and able to sell at a specific price.
Explain the law of supply in a concise sentence.
Explain the law of supply in a concise sentence.
As the price of a good increases, the quantity supplied of that good also increases, all other things being equal.
Describe how an advancement in technology could affect the supply curve for smartphones, assuming all other factors remain constant.
Describe how an advancement in technology could affect the supply curve for smartphones, assuming all other factors remain constant.
An advancement in technology would likely reduce production costs for smartphones, leading to an increase in supply and a rightward shift of the supply curve.
A new tax is levied on each unit of output for a particular good. Explain how this affects the supply curve. Be specific about the change in the supply curve.
A new tax is levied on each unit of output for a particular good. Explain how this affects the supply curve. Be specific about the change in the supply curve.
Suppose that climate change causes increasingly frequent and severe droughts in agricultural regions worldwide. Farmers anticipate that this will lead to higher agricultural commodity prices in the future. Explain how this expectation would affect the current supply curve for agricultural goods. Consider strategic decisions and inventory management in your answer.
Suppose that climate change causes increasingly frequent and severe droughts in agricultural regions worldwide. Farmers anticipate that this will lead to higher agricultural commodity prices in the future. Explain how this expectation would affect the current supply curve for agricultural goods. Consider strategic decisions and inventory management in your answer.
Flashcards
Quantity Supplied
Quantity Supplied
The quantity of a product that sellers are prepared to sell at a specific price.
Law of Supply
Law of Supply
The principle that the quantity supplied of a good increases when its price increases.
Supply Schedule
Supply Schedule
A table illustrating the correlation between the price of a product and the quantity supplied.
Supply Curve
Supply Curve
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Market Supply
Market Supply
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Study Notes
- Quantity supplied refers to the specific amount of a product or service that sellers are prepared to offer at a given price.
- The law of supply states that there is a direct relationship between price and quantity supplied, meaning as the price increases, the quantity supplied also increases, assuming all other factors remain constant.
- A supply schedule presents the relationship between different prices and the corresponding quantities supplied in a tabular format.
- A supply curve is a visual representation of the supply schedule, plotting price against quantity supplied, and it typically slopes upwards.
Market Supply vs. Individual Supply
- Market supply is the aggregate of all individual supply curves for a particular good or service.
- Market supply can be derived graphically by horizontally summing all the individual supply curves in the market.
Shifts in Supply
- Shifts in supply are caused by changes in factors other than the price of the good or service.
- Production costs influence supply; higher costs typically lead to a decrease in supply.
- Technological advancements can lead to an increase in supply.
- Natural factors such as weather events, disasters, and diseases can significantly impact supply.
- Seller expectations about future prices can influence current supply decisions.
- The number of sellers in a market affects supply; more sellers generally increase the market supply.
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