Supply

Question 1

List 5 determinants of supply

Answer 1

Changing costs of production
Technological progress
Prices of other goods and services
Government policy
Other factors (expectation of future events, level of competition in a market)

Question 2

What happens to supply if costs increase

Answer 2

It is more expensive to supply goods and so output is decreased

Question 3

What happens to a firm if there are technological progresses

Answer 3

They become more efficient and so firms are able to spread fixed costs over a larger output making the costs per unit cheaper

Question 4

A firm can produce both good A and B.
It is producing good B.
The price of good A increases.
Will the firms supply change?

Answer 4

It is more profitable to produce good A so production of good B decreases

Question 5

Name three government policies

Answer 5

Taxation
Indirect taxation
Subsidies

Question 6

What does taxation do to supply?

Answer 6

Decrease

Question 7

What do subsidies do to supply?

Answer 7

Increase