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LC Econ Supply 1
LC Economics Supply possible questions and answers
| Question | Answer |
|---|---|
| A new supply of oil is discovered off the coast of Wicklow will the demand curve or the supply curve shift | Supply curve |
| What is the relationship between individual supply and market supply? | There both quantities of a good or service that will be made available but one is an individual firm and the other is markets. |
| Distinguish between a change in supply and a change in quantities supplied | If price change there is a change in quantity supplied which is a movement along the existing supply curve. If any of the other factors change there is a change in supply which involves a shift to a completely new supply curve. |
| Capacity constraint | A physical limit to the quantity of a good that a firm is able to supply |
| Individual supply curve | A graph showing the different quantities of good a firm is willing to supply at each price |
| Individual supply scheldule | A list or table showing the different quantities of good a firm is willing to supply at each price |
| Law of Supply | The relationship between price and quantity supplied that applies to the vast majority of goods, that is, if price rises quantity supplied rises and if price falls quantity supplied falls. |
| Market (aggregate) supply curve | A graph showing the total quantities of a good that all firms are wiling to supply at each price |
| Market (aggregate) supply scheldule | A list or table showing the total quantities of a good that all firms are willing to supply at each price |
| Perfectly inelastic supply | A situation where quantity supplied is fixed regardless of price |
| State of technology | The methods of production available to firms |
| Supply function | A list of all factors affecting the supply of a good |
| Unplanned factors | Those factors that can affect the supply of a good that cannot be planned by firms in advance |
| Related goods | Goods that a firm could produce instead of the good it is currently producing. |
| Black market | An unofficial or illegal market. Example: Sellers offer tickets on this market at prices other than their face value. |
| Factors affecting the supply of a good | Price; prices of related goods; costs of production; state of technology; factors outside the control of a firm (strike/shortage of raw material/bad weather) |
| Other supply curves | Perfectly inelastic supply (SC is vertical, ex: flower stall) / Minimum Price (below min price supply will be zero, ex: min. wage) / Maximum output (Firm is unable to increase supply beyond a certain point because they have a capacity constraint) |
Created by:
MrFromholz
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