2281 · 2.4
Supply flashcards
Revision flashcards for Cambridge 2281 Supply (syllabus 2.4). Flip, recall, then mark a real past-paper question.
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What is supply?
The quantity of a product that producers are willing and able to sell at a given price over a period of time.
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What is the law of supply?
Other things being equal, a rise in price increases the quantity supplied and a fall in price reduces it.
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What is market supply?
The total quantity all producers in a market would supply at each price — the sum of the individual supply curves.
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What is an extension of supply?
A rise in quantity supplied caused by a rise in the product's own price — a movement up along the supply curve.
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What is a contraction of supply?
A fall in quantity supplied caused by a fall in the product's own price — a movement down along the supply curve.
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What are the conditions of supply?
The factors other than price that affect supply: costs, technology, taxes and subsidies, weather, number of producers and prices of related products.
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What shifts the supply curve to the right?
Lower costs, better technology, a subsidy, a good harvest, or more producers entering the market.
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What shifts the supply curve to the left?
Higher costs, an indirect tax, bad weather or disease, or producers leaving the market.
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What is joint supply?
When producing one good automatically produces another, such as beef and leather, so more of one means more of the other.
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What is competitive supply?
When the same resources can make either of two products, such as wheat or barley, so more of one means less of the other.