Name: MARK RAYMOND S.

ESTEVES
Task 1: Read the hand out on Supply and watch the uploaded video.
Task 2: Then answer the following questions:
1. In your OWN WORDS, define the following terms: (2 points each)
a. supply — the amount of stock of goods and services
b.  law of supply — as the price of a good or service increases, the number of goods or services
supplied will increase, and vice versa. the law of supply denotes that price and supply have an
inverse relationship.
c. supply schedule — it is a presentation of the availability of a product or service in a tabular
form along with its price and quantity.
d. supply curve — a graphical representation that shows the connection between good and the
quantity of that good that suppliers are willing to provide.
2. Based on the law of supply, explain the relationship between the price and supply. (5 points)
— As the cost of a certain good or service rises, so does the amount supplied. This is because
producers want to sell more goods or service at a greater price. In contrast, when the price of a
commodity or service falls, so does the amount given. This is due to producers' unwillingness to
supply the product or service at a cheaper price.
3. what happens to supply when production costs increases? Explain. (5 points)
— Usually, the decreases. It is because the production costs also rise and producers must a
higher price for their product in order to make a profit for their goods. When this happens, most
of the time, the product becomes less appealing to buyers, who want less of it, resulting in a
decrease in supply.
4. What happens to a supply curve when a change in supply occurs? Explain. (5 points)
— The supply curve changes to the right when the change in supply increases, and to the left
when the change in supply decreases. This will depend on what type of change that can occur.
5. For each problem, answer the question then ILLUSTRATE the change that will occur on the
graph below. First draw the original supply lime and label it “S”. Then draw the new supply line
and label it “S1.” (25 points with proper labeling)

1. Sony purchases new technology that will allow more PlayStation 3s to be produced each
hour. This will _______INCREASE____________ supply. (5 points)
S
S

S1
S
2. Company B attempts to increase profits by raising prices. How will this change the supply
curve? _________________________________________________________ (5 points)

S1
S

3. The government places strict pollution regulation on automotive producers in Detroit. How will
this affect Ford’s supply levels? (5 points)
– This will daffect the supply levels of Ford because government policies are
considerable factors when it comes to the law of supply.

S
S1

4. A government agency feels too much wheat is being produced and stops all subsidies to
wheat farmers for one year. This will cause wheat production to __DECREASE__. (5 points)
— This will have an effect in supply and it would decrease it by cutting all subsidies to
wheat farmers.

S
S1
5.A development firm has bought all the land around a large lake northern Arkansas. The local
government places a high property tax on the land to raise money for a nearby school. (5
points)
— This will affect the supply since the government made a move that will decrease the
supply such as placing a high property tax.

S
S1