Real-World Examples of Change in Quantity Supplied and Supply Shifts

📚 Quick Study Guide

• 📈 Change in Quantity Supplied: This is a movement *along* the supply curve, caused only by a change in the price of the good itself. Think of it as suppliers reacting directly to price changes.
• ➡️ If the price increases, the quantity supplied increases.
• ⬅️ If the price decreases, the quantity supplied decreases.
• ⚙️ Supply Shift: This is a *shift* of the entire supply curve, caused by factors other than the price of the good itself (e.g., technology, input costs, number of sellers, expectations, government policies).
• ➡️ A shift to the right represents an increase in supply.
• ⬅️ A shift to the left represents a decrease in supply.
• 💰 Factors that Shift Supply:
  • 🏭 Input Costs: Prices of resources used in production (e.g., labor, raw materials).
  • 💡 Technology: Improvements in production methods.
  • 👨‍💼 Number of Sellers: The quantity of companies producing the product.
  • ⏳ Expectations: Producers' beliefs about future prices.
  • 🏛️ Government Policies: Taxes and subsidies.

Practice Quiz

1. Which of the following would cause a change in the quantity supplied of corn?
   1. A. A new, more efficient fertilizer.
   2. B. A decrease in the price of fertilizer.
   3. C. An increase in the price of corn.
   4. D. A government subsidy for corn production.
2. What happens to the supply curve for gasoline if the price of crude oil (a major input) increases?
   1. A. The supply curve shifts to the right.
   2. B. The supply curve shifts to the left.
   3. C. There is a movement along the supply curve.
   4. D. The supply curve does not change.
3. A technological innovation that reduces the cost of producing solar panels would:
   1. A. Decrease the quantity supplied of solar panels.
   2. B. Increase the quantity supplied of solar panels.
   3. C. Decrease the supply of solar panels.
   4. D. Increase the supply of solar panels.
4. If several new coffee shops open in a city, what is the likely impact on the supply of coffee?
   1. A. The supply of coffee decreases.
   2. B. The supply of coffee increases.
   3. C. The quantity supplied of coffee decreases.
   4. D. The quantity supplied of coffee increases.
5. Farmers expect that the price of wheat will be higher next month. What is the likely impact on the supply of wheat this month?
   1. A. The supply of wheat increases.
   2. B. The supply of wheat decreases.
   3. C. The quantity supplied of wheat increases.
   4. D. The quantity supplied of wheat decreases.
6. The government imposes a new tax on the production of cars. What is the likely effect on the supply of cars?
   1. A. The supply of cars increases.
   2. B. The supply of cars decreases.
   3. C. The quantity supplied of cars increases.
   4. D. The quantity supplied of cars decreases.
7. Suppose there is a decrease in the price of steel, used to manufacture refrigerators. What is the likely impact on the supply of refrigerators?
   1. A. The supply of refrigerators decreases.
   2. B. The supply of refrigerators increases.
   3. C. The quantity supplied of refrigerators decreases.
   4. D. The quantity supplied of refrigerators increases.