EC 201 Lecture Notes - Lecture 3: Resource Productivity, Natural Disaster
Document Summary
The law of supply : a principle in economics that states that as the price of a good, service or resource rises, the quantity supplied will increase, and vice versa, all else held constant. Price (how much they would sell it for) Curve shifts: to the right= increase, to the left=decrease. Increase/decrease in supply = shift in supply curve. Change in quantity supplied= move up and down supply curve. T axes and s ubsidies: some form of payment to/from the government. Tax- any payment made to the government as a result of economic activity (on businesses) If tax is put on sellers or if there is an increase in taxes, it will cost more to produce/supply products so the supply curve will shift to the left (decrease in supply of goods/services) Subsidy: payment made by the government (payments to businesses), doesn"t require economic activity (ex.
