Supply practice

1. The following supply schedule shows the original quantity of hand sanitizers
supplied at a local grocery store in the three months preceding the
pandemic and the new quantity supplied in the first three months of the
pandemic. Draw two supply curves on the SAME pair of axes to illustrate
this information.
Price (in TT$) Quantity Supplied New Quantity Supplied
35 500 800

30 400 700

25 300 600

20 200 500

15 100 400

P 35

30

25

20

15

10

0 100 200 300 400 500 600 700 800 Quantity

0
2. The following supply schedule shows the original quantity of dog food
supplied at a local pet store in the three months preceding the pandemic
 and the new quantity of dog food supplied in the first three months of the
pandemic. Draw two supply curves on the SAME pair of axes to illustrate
this information.
Price (in TT$) Quantity Supplied New Quantity Supplied
50 100 120

45 80 100

40 60 80

35 40 60

30 20 40

Price

50

40

30

20

10

0 15 30 45 60 75 90 100 120 Quantity

0

3. State whether each situation would cause supply to shift to the right
(increase) or shift to the left (decrease):

a) An increase in the wages paid to workers.

 b) An indirect tax on raw material used by the business to make its product.

c) A subsidy given to local cassava farmers.

d) A business that produces milky “sucker bags” realizes that it can produce
“punch” using the same resources and charge a higher price. What will
happen to supply of sucker bags as well as supply of bottles of punch.

e) New technology e.g. a new industrial robot for assembling cars.

f) A clothing factory in a high crime area.

g) A tropical storm that brings flooding to a tomato farm.

Highlight the correct word or phrase from the brackets:

4. A movement along the supply curve is caused by (price changing, non-price
factors changing).
5. A movement along the curve to the left of the curve is called (a contraction,
a decrease in supply).
6. A movement along the curve to the right is called (an extension, an increase
in supply).
7. A shift of the entire supply curve is caused by (price changing, non-price
factors changing).
8. A shift to the left is called (an increase in supply, a decrease in supply).
9. A shift to the right is called (an increase in supply, a decrease in supply).
10. When “quantity supplied” has increased, this refers to (a movement along
the supply curve, a shift of the supply curve).
11.When “supply” has increased, this refers to (a movement along the supply
curve, a shift of the supply curve).

12. In your own words, explain what “ceteris paribus”

means…………………………………………………………………………………………………………
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…………………………………………………………………………………………………………………….

13.Use ceteris paribus in defining the law of supply

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14.What is the definition of supply?