Supply

Question 1

Supply

Answer 1

Indicates the various quantities of a good a firm is willing and able to produce at different possible prices during a particular period of time

Question 2

law of supply

Answer 2

A law stating that there is a positive relationship between price and quantity supplied over a particular period of time ceteris paribus

Question 2

Decrease/fall in supply

Answer 2

Inward shift

Question 3

Increase/rise in supply

Answer 3

Outward shift

Question 4

non price determinents of increase of supply

Answer 4

• decrease of competitive supply
• increase in joint supply
• subsidies/decrease in tax
• favorable weather (better=prodcue more wheat)
• other products become less profitable to produce
• a fall in FOP costs
• technical progress
• increase in the supply of resources
• increase in business optimism and expectations

Question 5

non price determinents of decrease of supply

Answer 5

• decrease of competitive supply
• decrease in joint supply
• no more subsidies/higher tax
• increase in FOP costs
• less favorable weather (bad= less harvesting)
• technical failures
• fall in supply of resources
• decrease in business optimism

Question 6

Extension of supply

Answer 6

Movement along the curve increasing supply as price increases

Question 7

Contraction of Supply

Answer 7

Movement along the curve, decreasing supply as price decreases

Question 8

Competitive Supply

Answer 8

In the case of two goods, refers to production of one or the other by a firm (if the price of one increases, the supply of the other decreases)

Question 9

Joint supply

Answer 9

Refers to production of two or more goods that are derived from a single product, so that it is not possible to produce more of one without producing more of the other

(If the price of one increases the supply of the other will inevitably increase)

Slaughter sheep: more skin & wool & mutton

Question 10

Subsidy

Answer 10

an amount of money paid by the government for various reasons
=> prevent industry failure
=> support producers

Question 11

Market Supply

Answer 11

the sum of all individual firms supply of a good or service

Question 12

Shape of supply curve

Answer 12

Upward sloping because as the price increases producers are more motivated to produce a larger quantity of prodct/service

Question 13

What happens to PES as price keeps continuously rising

Answer 13

approach unitary elasticity

Question 14

Increased supply Diagram

Answer 14

Question 15

non price determinants of supply

Answer 15

JESSR

Joint supply
expectation
subsidy/tax
shocks
resource prices

Question 16

Entrepreneurship

Answer 16

A person willing to take on the risks of starting a business by combining all factors of production (CELL)