Chapter 3 quiz reviews

Quantity Supplied

- Is the actual amount of a good or service people are willing to sell at some specific price. - Is the quantity that producers are willing and able to sell at a particular price.

Supply Curve

- Shows the relationship between quantity supplied and price. - Shows the quantity supplied at various prices.

Demand and supply model

A model of how a competitive market behaves.

Graphically, present a shortage in a market. Identify the Qdx, Qsx, and the quantity exchanged (the quantity bought and sold) during the shortage. How will the Px, Qdx, and Qsx change to reach equilibrium?

During the shortage, the quantity exchanged will be at a low price Px2 for Qsx on the left side of the Qe, and while Qdx will be on the right side of the Qe. Qdx must move up along the demand curve, while Qsx must move up along the supply curve, and both of them must have an increase in the Price of x.

Graphically, demonstrate how an increase in the expected future price of a product affects both demand and supply curves, and the market equilibrium price.

How it will affect the demand curve is that the demand curve will shift right, and the supply curve will shift left. When it comes to the market equilibrium, the demand will shift to the right, and while supply will shift to the left.

How do the terms "increase in supply" and "decrease in supply" relate to shifts in the supply curve?

If there's an increase in supply, the supply curve will shift to the right, and if there's a decrease in supply, the supply curve will shift to the left.

Given a fixed demand curve in a market, what will be the impact of a decrease in supply (leftward shift in the supply curve)? How will the Pe and Qe change?

If there's less producers, old bad technology, and if the input prices/business cost rise. There will be a leftward shift in Qe, and there will be an upward shift in Pe.

Given a fixed demand curve in a market, what will be the impact of an increase in supply (or a rightward shift in supply)? How will the Pe and Qe change?

If there's more producers, better technology, and if the input prices/business cost fall. There will be a rightward shift in Qe, and there will be a downward shift in Pe.

Supply

Refers to the number of units of a good or service business firms in an industry are willing and able to offer for sale at various prices over a given period of time.

What determines the position of the supply curve?

The cost of input goods such as material and parts that go into a certain product, wages, and other business cost.

What is the difference between "decrease in supply" and "decrease in quantity supplied"?

The difference between those is that a decrease in supply means that the supply curve has shifted to the left, and while a decrease in quantity supplied means that any given price has decreased.

What is the difference between "increase in supply" and "increase in quantity supplied"?

The difference is that an increase in supply means that the supply curve has shifted to the right, and while an increase in quantity supplied means that any given price has increased.

What is the difference between "supply" and "quantity supplied"?

The difference is that supply is the number of goods available at each particular price, while quantity supplied is the actual/exact amount of good or service people are willing to sell at some specific price.

exogenous factors of supply

The number of producers, technology, input prices, expected future price, price of related goods and services.

What determines the positive slope of the supply curve?

The product price and quantity supplies.

Given a fixed supply curve in a market, what will be the impact of a decrease in demand, ( a leftward shift in the demand curve)

The rise in the price of complement, the price of substitute fall, and fewer number of population or consumer. There will be a leftward shift in the Qe, and there will be a downward shift in Pe.

Given a fixed supply curve in a market, what will be the impact of an increase in demand ( or a rightward shift in demand)? How will the Pe and Qe change?

The rise of population, the increase in income, and the rise in the price of substitute. There will be a rightward shift in Qe, and there will be an upward shift in Pe.

What happens when the price of the product has declined?

There will be a decrease in quantity supplied.

What happen when producers expect the future price of this product will increase?

There will be a decrease in supply.

What happens when the price of a substitute in production has increased?

There will be a decrease in supply.

What happen when the price of the product has increased?

There will be an increase in quantity supplied.

What happen if technology has advanced?

There will be an increase in supply.

What happens when the number of producers has increased?

There will be an increase in supply.

When do we move along the supply curve? When do we shift the supply curve?

We move along the supply curve when there's a change in the quantity supplied, which arises from a change in the good's price. We shift the supply curve when there is a change in the quantity supplied of a good or service at any given price.

Surplus

happens when the price of good x is higher the price of equilibrium. At that point, the quantity supply will higher than the quantity demanded. (Qsx- Qdx= surplus).

move along curve

is a change in the quantity supplied of a good arising from a change in the good's price. (price change).

shift if supply curve

is kind of similar to the demand curve. change of the original supply curve to a new position (either shift left or right) due to the exogenous factors.

market equilibrium

occurs at one price and one price only (when the quantity demanded of x equal to the quantity supplied of x (Qdx = Qsx)).

Shortage

occurs when price of good x is lower the price of equilibrium. At this point, Qdx is greater than Qsx.