Lesson 11

Question 1

Subsidies

Answer 1

the gov. gives money to businesses

Question 2

Tax (who does it take money from…)

Answer 2

take money from businesses (from the gov.)

Question 3

Supply

Answer 3

ability + willingness of a firm to sell a good at a given price

Question 4

Individual supply

Answer 4

ability + willingness of a single firm to sell a good at a given price

Question 5

Market supply

Answer 5

ability + willingness of all firms to sell a good at a given price

Question 6

Extension of supply means that an…

Answer 6

increase in price

increased the quantity supplied

+ vice versa

Question 7

Increase in supply is signified on a graph by…

Answer 7

the supply curve shifting outwards

Question 8

What does the supply curve shifting outwards mean?

Answer 8

there is an increase quantity supplied at every price level

Question 9

Competitive supply

Answer 9

When goods are substitutes

so producers have to choose which good to supply

Question 10

Joint Supply

Answer 10

When products are supplied together

often as a byproduct

e.g. a PS5 and a disk drive

Question 11

Byproduct

Answer 11

an incidental product supplied by supplying something else

e.g. a PS5 comes with a disk drive as you need a way to play the games

Question 12

draw a typical supply curve

Answer 12

N/A

Question 13

Draw a diagram showing extensions and contractions on a supply curve + explaining

Answer 13

N/A

Question 14

Draw a diagram showing shifts in a supply curve + explaining

Answer 14

N/A

Question 15

What is the difference between a contraction in supply and a shift backwards of supply?

Answer 15

contraction in supply leads to a decrease in quantity supplied at SPECIFIC price level

whereas

A shift does the same but for EVERY price level