3.1.3.2 Supply

• The Law of Supply states that as the price of a good decreases, the quantity supplied increases.

  False
• Why does the quantity supplied increase as the price rises according to the Law of Supply?

  Higher profits
• What does a supply schedule show?

  Quantity supplied at different prices
• The supply curve slopes downwards to the right.

  False
• Why do producers supply less of a good when its price is low?

  Lower profits
• The Law of Supply states that higher prices usually lead to increased profits
• Match the factor with its effect on supply:

  Production Costs ↔️ Increase costs decrease supply

  Technology ↔️ Improved technology increases supply

  Government Policies ↔️ Tax increases decrease supply
• Tax increases decrease supply
• What is a supply curve?

  Graphical representation of supply schedule
• A change in price leads to a change in quantity supplied.


  True
• What does supply refer to in economics?

  Quantity producers offer for sale
• The Law of Supply states that as the price of a good increases, the quantity supplied by producers also tends to increase
• Match the factor affecting supply with its effect:

  Production Costs ↔️ Increase costs decrease supply

  Technology ↔️ Improved technology increases supply

  Government Policies ↔️ Tax increases decrease supply

  Number of Producers ↔️ More producers increase supply
• The supply curve is a graphical representation of the supply schedule, plotting quantity on the x-axis and price on the y-axis.
• What happens to profits when prices increase according to the Law of Supply?

  Profits increase
• What does the Law of Supply state?

  Price increases, quantity supplied increases
• Higher prices incentivize producers to increase their output.


  True
• How does improved technology affect supply?

  Shifts supply curve right
• Positive external shocks shift the supply curve to the right.


  True
• The supply curve slopes upwards
• A change in supply is caused by factors other than price