IGCSE Econ Ch8 Supply

A supply curve for a commodity is drawn to show how quantity supplied varies with

• government taxes

• income

• tastes

• the price of the commodity.

What is most likely to reduce the supply of factors of production in an economy?

• increasing the age of retirement

• introducing new methods of irrigation

• lowering the cost of borrowing from banks

• raising the rate of tax on profits

A government taxes the production of cars.

What is likely to decrease?

• the cost of supplying cars

• the price of cars

• the revenue for the government

• the supply of cars at every price

A government subsidises the production of pineapples.

This is likely to

• increase the price of pineapples.

• raise the costs of supplying pineapples.

• raise revenue for the government.

• cause the supply of pineapples to increase at every price.

What effect does a decrease in production costs have on the supply curve of a commodity?

• It shifts the supply curve to the left.

• It shifts the supply curve to the right.

• It causes a movement along the supply curve.

• It has no effect on the supply curve.

How does an increase in consumer income affect the supply of a normal good?

• It decreases the supply of the good.

• It increases the supply of the good.

• It has no effect on the supply of the good.

• It causes a movement along the supply curve.