Supply

Question 1

theory of supply

Answer 1

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

Question 2

why is the supply curve upwards sloping?

Answer 2

law of increasing costs

cannot keep up with marginal increase in costs without raising price

Question 3

what does the increased price act as?

Answer 3

incentive to produce more

Question 4

supply equation

Answer 4

Qs = mP + A

Question 5

lower cost of production

Answer 5

increase in supply

Question 6

wages increase

Answer 6

decrease in supply

Question 7

intermediate good

Answer 7

good used in the eventual production of a final good

Question 8

component

Answer 8

uniquely identifiable input into production

Question 9

higher cost of intermediate good/component

Answer 9

decrease in supply

Question 10

improvements in technology

Answer 10

increase in supply

Question 11

decrease in taxes

Answer 11

increase in supply

Question 12

increase in subsidies

Answer 12

increase in supply

Question 13

expectation of future price fall

Answer 13

increase in supply

Question 14

increase in number of producers

Answer 14

increase in supply

Question 15

cost of storage increases

Answer 15

decrease in supply

Question 16

goods in competitive supply

Answer 16

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

Question 17

complements of production

Answer 17

byproducts (same resources will produce two goods)

Question 18

if Qs - Qd -ve

Answer 18

shortage (price will rise)

Question 19

if Qs - Qd +ve

Answer 19

surplus (price will fall - sales)

Question 20

if Qs - Qd 0

Answer 20

equilibrium

Question 21

exceptions to supply curve

Answer 21

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