Real-World Examples: Change in Quantity Supplied and Change in Supply

📚 Quick Study Guide

• 📈 Change in Quantity Supplied: This refers to a movement *along* the existing supply curve. It's caused *only* by a change in the price of the good itself. Think of it as producers reacting directly to price fluctuations.
• 💸 Change in Supply: This refers to a *shift* of the entire supply curve (either to the left or to the right). This is caused by factors *other than* the price of the good itself. These factors include:
• ⚙️ Input Costs (e.g., wages, raw materials)
• 🏭 Technology
• 🏛️ Government Policies (e.g., taxes, subsidies)
• 🌍 Number of Sellers
• 🌦️ Expectations of Future Prices
• 📐 Key Difference: Quantity supplied changes *because* the price changed. Supply changes *regardless* of the price; other factors are at play.
• ✍️ Visual Representation: A change in quantity supplied is a *movement* on the curve. A change in supply is a *shift* of the entire curve.

Practice Quiz

1. What causes a change in the quantity supplied?
   1. A) Change in consumer income.
   2. B) Change in the price of the good itself.
   3. C) Change in the cost of raw materials.
   4. D) Change in technology.
2. If the price of steel increases, what is the likely effect on the supply of cars?
   1. A) The supply of cars will increase.
   2. B) The supply of cars will decrease.
   3. C) The quantity supplied of cars will increase.
   4. D) The quantity supplied of cars will decrease.
3. A new technology lowers the cost of producing smartphones. What will happen to the supply curve for smartphones?
   1. A) The supply curve will shift to the left.
   2. B) The supply curve will shift to the right.
   3. C) There will be a movement along the supply curve.
   4. D) The supply curve will not change.
4. Suppose the government imposes a new tax on the production of televisions. What is the likely effect?
   1. A) The supply of televisions will increase.
   2. B) The supply of televisions will decrease.
   3. C) The quantity supplied of televisions will increase.
   4. D) The quantity supplied of televisions will decrease.
5. If orange growers expect the price of oranges to be much higher next month, what is likely to happen to the *current* supply of oranges?
   1. A) The current supply of oranges will increase.
   2. B) The current supply of oranges will decrease.
   3. C) The quantity supplied of oranges will increase.
   4. D) The quantity supplied of oranges will decrease.
6. Which of the following would *NOT* cause a change in supply?
   1. A) A change in the price of related goods.
   2. B) A change in technology.
   3. C) A change in the number of sellers.
   4. D) A change in the price of the good itself.
7. Farmers can grow either wheat or corn on their land. If the price of corn increases, what is the likely effect on the supply of wheat?
   1. A) The supply of wheat will increase.
   2. B) The supply of wheat will decrease.
   3. C) The quantity supplied of wheat will increase.
   4. D) The quantity supplied of wheat will decrease.