G7 - Supply

SUPPLY

Multiple Choice

The willingness and ability of a producer to make a product is referred to as

• quantity supplied

• quantity demanded

• supply

• demand

Multiple Choice

When producers offer more of a good as its price increases and less as its price falls, this defines the

• law of demand

• law of supply

• change in demand

• change in supply

Multiple Choice

According to the law of supply, the relationship between price and quantity supplied is:

• Direct

• Inverse

• Not correlated

Multiple Choice

For the law of supply, as price rises, what happens to quantity supplied?

• it goes up
• it goes down
• it stays the same
• it is not effected

Multiple Choice

What does this curve represent?

• demand
• supply
• equilibrium
• shortage

Supply

The willingness and ability of
firms to make a product
available to consumers

As price rises, the quantity
supplied by producers extends
because production becomes
more profitable

As price falls, the quantity
supplied by producers

contracts because production
becomes less profitable

A supply curve slopes upwards

Multiple Choice

Cold weather in Florida has damaged this year’s orange crop. Farmers have only half of the usual amount of oranges to sell. What will happen to the price of oranges?

• The price will go up.
• The price will go down.

Multiple Choice

This part of the market determines SUPPLY

• buyers
• sellers
• consumers
• us

Fill in the Blank

When supply is LOW and demand is HIGH, price is ______.

Fill in the Blank

When supply is HIGH and demand is LOW, price is _______.

Market supply

The sum of all individual producers’ decisions about the supply of a particular product

A rise in supply

The market supply curve shifts outwards

Possible causes are:

•other products become less profitable to produce

•a fall in the cost of factors of production

•an increase in the supply of resources

•technical progress and improvements in
production processes and machinery

•an increase in business optimism and
expectations of profit

•the government subsidizes production and/or cuts
taxes on profits

•other factors, e.g. good weather boosts crop
harvests

Market supply

A fall in supply

The market supply curve shifts inwards

Possible causes are:

•other products become more profitable to produce

•a rise in the cost of factors of production

•a fall in the supply of resources

•technical failures, such as a cut in power supplies
or mechanical breakdowns

•a fall in business optimism and profit expectations

•the government withdraws subsidies and/or
increases taxes on profits

•other factors, e.g. wars and natural disasters

The sum of all individual producers’ decisions about the supply of a particular product

Multiple Choice

Besides price, what is one of the most important factors that can affect supply?

• The cost of production

• Advertisements

• Weather

Multiple Choice

The law of supply says:

• A producer will supply less as prices of a good increase.

• A producer will supply more as prices of a good decrease

• A producer will supply more as a price of a good increases.

Multiple Choice

Which graph below shows the SUPPLY CURVE?

• A
• B
• C
• D

Multiple Choice

The diagram represents a(n)

• increase in supply
• decrease in supply
• change in quantity supplied
• none of the above