All Flashcards
How does a decrease in the cost of raw materials affect the supply of finished goods?
It increases supply, shifting the supply curve to the right.
How does the introduction of new, more efficient technology affect the supply curve?
It increases supply, shifting the supply curve to the right.
How do higher taxes on production impact the supply of a product?
It decreases supply, shifting the supply curve to the left.
If suppliers expect the price of their product to rise significantly in the future, how will they adjust their current supply?
They will decrease current supply, anticipating higher profits later.
How does an increase in the number of firms producing a good affect the market supply?
It increases the overall market supply, shifting the supply curve to the right.
If the price of corn increases, how will this affect the supply of ethanol (assuming corn is a major input)?
The supply of ethanol will decrease, shifting the supply curve to the left.
A new regulation requires factories to install expensive pollution control equipment. How does this affect supply?
Supply decreases, shifting the supply curve to the left, as production costs increase.
A coffee shop expects a major coffee bean shortage next month. How will this affect their current supply of coffee?
The coffee shop will likely decrease its current supply to save beans for the expected higher prices.
A new competitor enters the market for organic vegetables. How does this affect the individual supply of the existing farmers?
The individual supply of the existing farmers decreases as the market share is divided.
How would a government subsidy for electric car production affect the supply of electric cars?
It would increase the supply of electric cars, shifting the supply curve to the right.
Define 'Supply'.
The various quantities of a good/service firms are willing and able to produce at different price levels.
Define 'Quantity Supplied'.
A specific amount of a good/service produced at a particular price; a single point on the supply curve.
What is the Law of Supply?
There is a direct (positive) relationship between price and quantity supplied.
Define 'Determinants of Supply'.
Factors that cause the entire supply curve to shift (increase or decrease).
What does 'Resources' refer to in the context of supply?
The cost of inputs (raw materials, labor, etc.) used in production.
What does 'Other goods prices' refer to in the context of supply?
The price of alternative goods a firm could produce instead.
What does 'Taxes' refer to in the context of supply?
Government levies that increase the cost of production.
What does 'Technology' refer to in the context of supply?
The methods and processes used in production.
What does 'Expectations' refer to in the context of supply?
Suppliers' beliefs about future prices.
What does 'Number of competitors' refer to in the context of supply?
The quantity of firms in the market.
How does a government subsidy to farmers affect the supply of agricultural products?
It increases the supply, shifting the supply curve to the right.
How do stricter environmental regulations on factories affect the supply of manufactured goods?
It decreases the supply, shifting the supply curve to the left.
What is the likely impact of a tax on imported goods on the domestic supply of those goods?
It reduces the domestic supply, shifting the supply curve to the left.
How does deregulation (removal of regulations) in an industry typically affect supply?
It increases supply, shifting the supply curve to the right.
How might a price ceiling (set below the equilibrium price) affect the quantity supplied?
It would decrease the quantity supplied, leading to a shortage.
How might a price floor (set above the equilibrium price) affect the quantity supplied?
It would increase the quantity supplied, leading to a surplus.
How does a tax on producers affect consumer prices and quantity sold?
It increases consumer prices and reduces the quantity sold.
What is the effect of import tariffs on domestic supply?
It decreases domestic supply and increases domestic prices.
How does a government-imposed quota on production affect the supply curve?
It shifts the supply curve to the left, limiting the quantity supplied.
How does a carbon tax on manufacturers affect the supply of goods?
It decreases supply, shifting the supply curve to the left, as production costs increase.