Exam code: 0455 & 0987
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Define supply.
Supply is the amount of a good or service that a producer is willing and able to supply at a given price in a given time period.
True or False?
When the price of a good rises, the quantity supplied falls, ceteris paribus.
False.
When the price rises, the quantity supplied rises, according to the law of supply.
Define market supply.
Market supply is the total quantity supplied of a good or service by all producers at each price level, calculated by adding up individual supply.
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Define supply.
Supply is the amount of a good or service that a producer is willing and able to supply at a given price in a given time period.
True or False?
When the price of a good rises, the quantity supplied falls, ceteris paribus.
False.
When the price rises, the quantity supplied rises, according to the law of supply.
Define market supply.
Market supply is the total quantity supplied of a good or service by all producers at each price level, calculated by adding up individual supply.
A supply curve is a graphical representation of the and supplied by producers.
A supply curve is a graphical representation of the price and quantity supplied by producers.
At a price of $1,000, what is the market supply of smartphones in New York City in December if iPhone supply is 300 units and Samsung supply is 320 units?
The market supply of smartphones at $1,000 is 620 units, which is the sum of iPhone (300) and Samsung (320) supplies.
Define conditions of supply.
The conditions of supply are the non-price factors that can shift the entire supply curve for a good or service, such as changes to costs of production, taxes, subsidies, technology, number of firms, weather, or future price expectations.
What causes a movement along the supply curve?
A movement along the supply curve is caused only by a change in the price of the good or service, with all other factors remaining constant.
An increase in price from £7 to £9 causes a movement the supply curve to the right, known as an extension in quantity supplied.
An increase in price from £7 to £9 causes a movement up the supply curve from point A to B, known as an extension in quantity supplied.
How does an increase in the costs of production affect the supply curve?
An increase in the costs of production causes the supply curve to shift to the left, indicating a decrease in supply.
If increase, the supply curve shifts left, but if they decrease, the supply curve shifts right.
If costs of production increase, the supply curve shifts left, but if they decrease, the supply curve shifts right.
What is the effect of an increase in subsidies for producers?
An increase in subsidies lowers production costs and shifts the supply curve to the right, increasing supply.
True or False?
A higher indirect tax increases supply and shifts the supply curve to the right.
False.
A higher indirect tax increases production costs, causing supply to decrease and the supply curve to shift to the left.
When the of firms in an industry increases, the supply curve shifts right; if it decreases, the supply curve shifts left.
When the number of firms in an industry increases, the supply curve shifts right; if it decreases, the supply curve shifts left.
How do weather events affect supply in agricultural markets?
Good weather increases supply and shifts the supply curve right, while bad weather or disasters like droughts decrease supply and shift the supply curve left.
How does an improvement in technology affect the supply curve?
An improvement in technology increases productivity, lowers costs, and shifts the supply curve to the right.
A shift of the supply curve occurs when there is a change in the of supply, not just a change in price.
A shift of the supply curve occurs when there is a change in the conditions of supply, not just a change in price.
What happens to the supply curve if producers expect future prices to rise?
If producers expect future prices to rise, supply will increase and the supply curve will shift to the right as firms are incentivised to produce more.