MOVEMENT ALONG THE SUPPLY CURVE AND SUPPLY CURVE SHIFTS

What is the topic of group 1 ?

• quantity demanded, law of demand; two ways to illustrate demand

  (demand schedule and demand curve)

• Difference between movement along the demand curve and

  demand curve shifts

• quantity supplied, law of supply; two ways to illustrate supply

  (supply schedule and supply curve)

• Difference between movement along the supply curve and supply

  curve shifts

What causes movements along the supply curve?

• Movements along the supply curve are caused by the supply curve moving to the  right or to the left. This is an increase, or decrease, in supply.

• Movements along the supply curve are caused solely by changes in the  price, which in turn are caused by shifts of the demand curve.

• A chance in the price of the good.

• A different quantity to be demanded at any given price, include changes in tastes, population, income, prices of substitute or complement goods, and expectations about future conditions and prices.

What cause shifts of the supply curve?

• A different quantity to be demanded at any given price, include changes in tastes, population, income, prices of substitute or complement goods, and expectations about future conditions and prices.

• A chance in the price of the good.

• Movements along the supply curve shifts are caused solely by changes in the  price, which in turn are caused by shifts of the demand curve.

• A shift of the supply curve is seen by the supply curve moving to the  right or to the left. This is an increase, or decrease, in supply. All the  causes of these shifts in supply are non-price ones, i.e.

(Supply of Baseball Hats) Ross creates a business selling baseball hats. He begins his business with machines he bought second hand. After making a great deal òf profit, he upgrades to a new updated machine system that allows him to produce bats faster.

• Curve Shifts Right

• Curve Shifts Left

• Movement Along the Curve

(Supply of Toys ?) Workers at a toy factory go on strike as a result of poor conditions and low wages.

• Curve Shifts Left

• Curve Shifts Right

• Movement Along the Curve

Which of the following would not shift the supply curve for Iphones ?

• An increase in the price of iphones

• a decrease in the number of seller of iphones

• an increase in the price of plastic, an input into the production of iphones

• an improvement in the technology used to produce iphones

Refer to graph. On the graph, what could most likely cause the movement from S to S1

• A decrease in the price of the good.

• An increase in income.

• An improvement in technology.

• An increase in input prices.