1.6 Supply

• What does supply refer to in economics?

  Quantity producers offer
• Order the following factors affecting supply based on their primary impact.

  1️⃣ Production costs

  2️⃣ Technology

  3️⃣ Number of sellers

  4️⃣ Government policies

  5️⃣ Natural factors
• The law of supply assumes all other factors remain constant.

  True
• A supply schedule illustrates the inverse relationship between price and quantity supplied.

  False
• Match the price per pound of strawberries with the quantity supplied (pounds):

  $2 < item1_{e}nd > < item2_{s}tart > 200 < item2_{e}nd > < pair_{e}nd > < pair_{s}tart > < item1_{s}tart >$3 ↔️ 300

  $6 ↔️ 600
• What does a supply curve graphically represent?

  Price and quantity supplied
• A supply curve can be derived from a supply schedule
• Match the features of supply and demand:

  Definition ↔️ Quantity offered by producers ||| Quantity desired by consumers

  Motivation ↔️ Profit maximization ||| Utility maximization

  Relationship with Price ↔️ Direct ||| Inverse
• An increase in the number of sellers increases the total supply in the market.


  True
• Improvements in technology can increase supply by reducing production costs


  True
• Natural disasters like droughts can disrupt supply and reduce agricultural output


  True
• Higher prices encourage producers to supply more goods to maximize profits


  True
• The upward-sloping relationship between price and quantity supplied is a key characteristic of the law of supply
• What is the primary purpose of a supply schedule?

  Demonstrate the law of supply
• A market supply curve represents the total supply by all producers in the market.


  True
• The upward slope of a supply curve reflects the law of supply.


  True
• Factors that can affect supply

  1️⃣ Production costs

  2️⃣ Technology

  3️⃣ Number of sellers

  4️⃣ Government policies

  5️⃣ Natural factors
• Government subsidies can increase supply.


  True
• The motivation behind supply is profit maximization
• Match the factor affecting supply with its effect and an example.

  Production costs ↔️ Higher costs decrease supply || Increased steel prices reduce car production

  Technology ↔️ Improvements increase supply || Automated assembly lines produce more cars

  Government policies ↔️ Taxes reduce supply, subsidies increase supply || Taxes on plastic bags decrease their supply

  Natural factors ↔️ Disruptions decrease supply || Droughts reduce crop supply
• Market supply is the total quantity supplied by all producers
• Market supply refers to the total quantity supplied by all producers in a market at various prices
• As the price of strawberries increases, farmers are willing to supply more strawberries to the market
• An individual supply curve illustrates the supply of a single producer.


  True
• What does an individual supply curve for a bakery show at $3 per loaf of bread?

  100 loaves
• Higher production costs will decrease supply
• What is an example of a government policy that can increase supply?

  Subsidies
• What effect does an increase in the number of sellers have on the total supply in the market?

  Total supply increases
• What is the law of supply?

  Positive relationship between price and quantity supplied
• Match the term with its definition:

  Supply schedule ↔️ Table showing quantity supplied at different prices

  Law of supply ↔️ Positive relationship between price and quantity supplied

  Natural factors ↔️ Disruptions like droughts affecting supply

  Technology ↔️ Improvements that increase production efficiency
• What does a supply schedule show?

  Quantity producers supply at prices
• As the price of strawberries increases, farmers are willing to supply more.

  True
• What does an individual supply curve show?

  Supply by one producer
• On a supply curve graph, price is on the y-axis and quantity supplied is on the x-axis.
• What does market supply represent?

  Total supply by all producers
• How do higher production costs affect supply?

  Decrease supply
• What effect can natural disasters have on supply?

  Decrease supply
• The relationship between price and supply is inverse.

  False
• What does the law of supply state?

  Price increases, supply increases
• What is a supply schedule?

  Quantity supplied at prices