Supply

Question 1

Supply

Answer 1

refers to the amount of quantity of a good or service that firms or producers are willing and able to produce at particular price and at particular time; ceteris paribus.

Question 2

Relationship between the price of a good and quantity supplied

Answer 2

There’s a positive relationship between the price of a good and quantity supplied this means that as price increases producers are willing to produce more of the good therefore quantity supplied increases

Question 3

Supply Curve

Answer 3

a line that shows the relationship between the price of a good and the quantity supplied of that good The curve is upward sloping as it reflects a positive relationship between the price and quantity supplied. the first law of supply states that as the price of a good increases it’s quantity supplied goes up

Question 4

Causes for shifts of the supply curve- technology

Answer 4

as technology increases the firm can now produce their goods more efficiently. This leads to an increase in supply at the same price causing the supply curve to shift rightward. Therefore, a decrease in supply at the same price causes the supply curve to shift leftward.

Question 5

Causes for shifts of the supply curve- climate

Answer 5

Climate conditions may hinder or promote the availability of raw materials. favorable climate conditions would lead to an increase in supply whilst unfavorable climate conditions would lead to a decrease in supply.

Question 6

costs of production

Answer 6

producers aim to keep their costs of production such as raw materials and labour costs, low to maximise profits.

so when wages increases or raw material prices increase, producers will have to reduce production in order to decrease cost of production

Question 7

government taxes

Answer 7

such as value added tax VAT can also lead to an increase in costs

Question 8

government subsidies

Answer 8

can help to reduce costs and increase supply

Question 9

types of supply

Answer 9

joint- goods that are supplied together

competitive- goods that are in direct competiton with each other in the production process. (kinda like ppf)

Question 10

SHIFTS OF (rightward, leftward) the supply curve

Answer 10

improvemnt in technology
costs of production
climatic conditions

Question 11

costs of production

Answer 11

firms aim to keep their costs of production such as raw materials, and labour costs , low to maximise profits. when wages and material prices increase, producers will have to reduce production in order to decrease cosst.

gvoernment taxes such as VAT can lead to increase costs.
government subsidies can helpmreduce costs and increase supplu

Question 12

decreased supply

Answer 12

contraction, a fall in price resulting in decreased quanttiy supplied

Question 13

increased supply

Answer 13

expansion

an increase in price resulting in increased quanttiy supplied

Question 14

climatic condition
changes in technology

Answer 14

• climate conditions can hinder or promote the availability of materails
• damaged machinery can lead to a decrease in supply