ECON 1201 Lecture Notes - Lecture 4: Qqq, Economic Equilibrium

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23 Sep 2016

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Supply schedule - a relationship between the price and quantity supplied. Supply curve - graphical representation of the supply schedule. Positive relationship between price and quantity supplied. Change in price, keeping all other factors constant. Number of firms in the market (entry/exit of firms) Expected future prices and other economic conditions. Could either shift curve to left or right. Usually causes a leftward shift of supply curves. Depends on how it affects production costs. At a price higher than the equilibrium price, there is a surplus, this pushed the price down (towards the equilibrium price) At a price lower than the equilibrium price, there is a shortage, this pushed the price up (towards the equilibrium price) ***sometimes it depends on the magnitude of change. Say you have a demand function qd = 5-6p, and the supply function is qs = 4+2p.

Related Questions

What is the difference between an 'increase in supply' and an 'increase in quantity supplied'?

A) There is no difference between the two terms; they both refer to a movement along a given supply curve.

B) There is no difference between the two terms; they both refer to a shift of the supply curve.

C) An 'increase in supply' means the supply curve has shifted to the right while 'an increase in the quantity supplied', means at any given price supply has increased.

D) An 'increase in supply' means the supply curve has shifted to the left while an 'increase in the quantity supplied' refers to a movement along a given supply curve in response to an increase in price.

peachwildebeest710

What is the difference between an "increase in supply" and an "increase in quantity supplied"?

A) There is no difference between the two terms; they both refer to a movement along a given supply curve.

B) There is no difference between the two terms; they both refer to a shift of the supply curve.

C) An "increase in supply" means that the supply curve has shifted to the right while an "increase in the quantity supplied" means at any given price supply has increased.

D) An "increase in supply" means that the supply curve has shifted to the right while an "increase in the quantity supplied" refers to a movement along a given supply curve in response to an increase in price.

aquamarinebear50

The law of supply indicates that:
a. there is an inverse relation between price and quantity supplied.
b. there is a direct relation between price and quantity supplied.
c. there is an inverse relation between the cost of inputs and the quantity supplied.
d. none of the above.

Graphically, an increase in supply can be shown as:
a. a rightward shift of the supply curve.
b. a leftward shift of the supply curve.
c. a rightward and upward movement along the supply curve.
d. a leftward and downward movement along the supply curve.

The full price of a visit to a movie includes:
a. the price of the tickets.
b. transportation costs.
c. the opportunity cost of using time for this activity instead of the next-best alternative.
d. all of the above.

Consumers make decisions based on:
a. full prices.
b. money prices.
c. transaction costs.
d. absolute costs.

Quantity demanded is graphically represented by a ______, while demand is graphically represented by a _______.
a. line, point.
b. intersection, line.
c. point, line.
d. point, intersection.

rubyyak525

ECON 1201 Lecture Notes - Lecture 4: Qqq, Economic Equilibrium

ECON 1201 Full Course Notes

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