AP Micro Examples: Distinguishing Supply Shifts from Quantity Supplied Movements

📚 Quick Study Guide

• 📈 Supply Curve: Shows the relationship between the price of a good or service and the quantity supplied.
• ➡️ Movement Along the Supply Curve: Occurs only due to a change in the price of the good itself. It's represented as a movement *along* the existing curve.
• 📐 Change in Quantity Supplied: This is the term for the movement along the supply curve.
• 🏭 Shift in the Supply Curve: Occurs due to changes in factors *other* than the price of the good itself. These factors include:
  • 💰Cost of inputs (e.g., labor, raw materials)
  • 🧪 Technology
  • 🏛️ Government regulations (e.g., taxes, subsidies)
  • ⏳ Expectations of future prices
  • 👯 Number of sellers
• ⬅️ Increase in Supply: Shifts the supply curve to the right. At each price, producers are willing to supply more.
• ➡️ Decrease in Supply: Shifts the supply curve to the left. At each price, producers are willing to supply less.

🧪 Practice Quiz

1. Which of the following would cause a movement *along* the supply curve for coffee?
   1. A) A decrease in the price of tea.
   2. B) An increase in the wages of coffee bean pickers.
   3. C) A drought that destroys coffee plants.
   4. D) An increase in the price of coffee.
2. What happens to the supply curve for smartphones if the cost of microchips (an input) increases?
   1. A) It shifts to the right (increase in supply).
   2. B) It shifts to the left (decrease in supply).
   3. C) There is a movement *along* the supply curve.
   4. D) The supply curve does not change.
3. A new technology allows factories to produce cars more efficiently. How does this affect the supply curve for cars?
   1. A) It shifts to the left (decrease in supply).
   2. B) It shifts to the right (increase in supply).
   3. C) There is a movement *along* the supply curve.
   4. D) The supply curve becomes vertical.
4. The government imposes a new tax on the production of widgets. What is the likely effect on the widget supply curve?
   1. A) It shifts to the right (increase in supply).
   2. B) It shifts to the left (decrease in supply).
   3. C) There is a movement *along* the supply curve.
   4. D) The supply curve does not change.
5. If orange growers expect the price of oranges to be much higher next month, what will happen to the supply of oranges *today*?
   1. A) It shifts to the right (increase in supply).
   2. B) It shifts to the left (decrease in supply).
   3. C) There is a movement *along* the supply curve.
   4. D) The supply curve does not change.
6. An increase in the number of firms producing solar panels will cause what change in the market supply curve for solar panels?
   1. A) A movement to the left along the supply curve.
   2. B) A movement to the right along the supply curve.
   3. C) A shift of the supply curve to the left.
   4. D) A shift of the supply curve to the right.
7. Which of the following would NOT cause a shift in the supply curve for apples?
   1. A) A change in the price of fertilizer.
   2. B) A change in the price of apples.
   3. C) A new regulation on pesticide use.
   4. D) A change in the number of apple orchards.