Understanding Supply Curves and their Shifts in Economics

The video tutorial explains the concept of supply curves, focusing on their basic upward-sloping shape and the factors that cause them to shift. It covers the law of supply, which indicates a positive relationship between price and quantity supplied due to profit motives. The tutorial distinguishes between movements along the supply curve due to price changes and shifts in the curve caused by factors like production costs, technology, and subsidies. It details both inward and outward shifts, explaining how these affect the quantity supplied at any given price.

What is the typical shape of the supply curve in a market?

• Downward sloping

• Upward sloping

• Horizontal

• Vertical

Which of the following factors can cause the supply curve to shift inward?

• Increase in subsidies

• Increase in production costs

• Increase in technology

• Decrease in production costs

What happens to the supply curve when production costs increase?

• It becomes horizontal

• It becomes vertical

• It shifts to the left

• It shifts to the right

Which factor would likely cause the supply curve to shift outward?

• Reduced subsidies

• Increased indirect taxes

• Higher input prices

• Improved technology

How does a decrease in indirect taxation affect the supply curve?

• It makes the curve flatter

• It makes the curve steeper

• It shifts the curve to the right

• It shifts the curve to the left