Theme 1.2 - Supply

Question 1

Define Supply

Answer 1

Quantity of a good that sellers are prepared to produce at a given price within a time period

Question 2

How does price affect supply?

Answer 2

Direct correlation
Price rises, supply increases
Price falls, supply decreases

Question 3

How do you infer increasing supply from the supply curve?

Answer 3

Curve moves down + to the right

Question 4

How do you infer decreasing supply from the supply curve?

Answer 4

Curve moves up + to the left

Question 5

What are the causes of shifts in the supply curve?

Answer 5

Costs of production
New technologies
Prices of other goods
Government
Number of producers
Weather/Climate

Question 6

How do the costs of production induce a shift in supply?

Answer 6

Fall in costs, increased supply
Rise in costs, lowered supply

Question 7

How do new technologies induce a shift in supply?

Answer 7

Should lower production costs + increase supply

Question 8

How does the price of other goods induce a shift in supply?

Answer 8

Substitution
Alternate goods/produce formed with same resources

Question 9

How does the government induce a shift in supply?

Answer 9

Policies such as tax, anti-pollution control can reduce supply

Question 10

How does the number of producers induce a shift in supply?

Answer 10

New firm enters market
Supply increases

Question 11

How does the weather + climate induce a shift in supply?

Answer 11

Farmable conditions, supply rises
Unfarmable conditions, supply falls