Supply Flashcards Preview

IB Economics Outside Flashcards > Supply > Flashcards

Flashcards in Supply Deck (21)
Loading flashcards...
1

theory of supply

at a higher price more will be supplied, ceteris paribus and vice versa

2

why is the supply curve upwards sloping?

law of increasing costs
cannot keep up with marginal increase in costs without raising price

3

what does the increased price act as?

incentive to produce more

4

supply equation

Qs = mP + A

5

lower cost of production

increase in supply

6

wages increase

decrease in supply

7

intermediate good

good used in the eventual production of a final good

8

component

uniquely identifiable input into production

9

higher cost of intermediate good/component

decrease in supply

10

improvements in technology

increase in supply

11

decrease in taxes

increase in supply

12

increase in subsidies

increase in supply

13

expectation of future price fall

increase in supply

14

increase in number of producers

increase in supply

15

cost of storage increases

decrease in supply

16

goods in competitive supply

if price of one goods goes up, producers will produce less of the other

17

complements of production

byproducts (same resources will produce two goods)

18

if Qs - Qd -ve

shortage (price will rise)

19

if Qs - Qd +ve

surplus (price will fall - sales)

20

if Qs - Qd 0

equilibrium

21

exceptions to supply curve

vertical (market) supply curve - occurs when have very small, finite amount of something