ECON supply

Other things constant, which of the following would not cause a change in the supply of beef?

A decrease in the price of beef

A fall in the price of milk, used in the production of ice cream, will:

increase the supply of ice cream, causing the supply curve of ice cream to shift to the right.

An improvement in the technology of production for a specific good is expected to cause:

lower prices and increased quantity sold.

Which is a determinant of supply?

number of suppliers

GRAPH: An increase in quantity supplied would best be reflected by a change from:

point 3 to 4

GRAPH: An decrease in quantity supplied would best be reflected by a change from:

point 5 to 1

What causes a movement along the supply curve?

price change, which results in quantity change

The law of supply states that as

price increases, quantity supplied increases.

If the price of a product decreases, we would expect:

quantity supplied to decrease.

If the price of a product increases, then that would cause...

quantity supplied to increase.

Which is a determinant of supply?

technology

The law of supply is illustrated by a supply curve that is

upward sloping.

A decrease in the supply of oranges in the United States is most likely to result from:

an increase in the cost of labor for harvesting oranges.

Which would cause an decrease in quantity supplied of product A?

decrease in the price of product A

A rise in the price of beans, used in the production of burritos, will:

decrease the supply of burritos, causing the supply curve to shift to the left

What causes a shift in the supply curve

external factors (TIPTEN) which results in supply change

An increase in corporate taxes on companies making a specific good is expected to cause:

higher prices and decreased quantity sold.

"Falling oil prices have caused a sharp decrease in the supply of oil." Speaking precisely, and using terms as they are defined by economists, choose the statement that best describes this quotation.

The quotation is incorrect: A decrease in price causes a decrease in the quantity supplied, not a decrease in supply.

You overhear a fellow student say: "Economic markets are like a slide: If supply increases, the price increases; if the price increases, then supply will fall. If supply falls, the price will rise; if the price increases, supply will increase and so on forever." Dispel your friend's obvious confusion (in no more than one short paragraph) below.

When prices fall, quantity supplied decreases. When prices rise, quantity supplied increases. This is the Law of Supply because suppliers like and want high prices, and so when prices change, a movement along the supply line/curve occurs. Furthermore, external factors like those in TIPTEN cause supply to increase or decrease, which makes a new supply line shift to the right or left. As a result, if supply increases, then equilibrium price falls while equilibrium quantity increases. If supply decreases, then equilibrium price rises while equilibrium quantity decreases. (Look at your Supply Shift TIPTEN notesheet to see this in the graph.)

An increase in the supply of wheat in the United States is most likely to result from:

a change in farming technology that improves the soil for wheat

Which will cause a movement along the supply curve?

a change in the price of the good

Which will not cause the supply curve to shift?

a change in the price of the good