AP Microeconomics Flashcards: Supply

What this deck covers

This deck focuses on Supply, giving you a quick way to review the definitions, rules, and examples that matter most for AP Microeconomics.

How to use these flashcards

Work through these flashcards in short sessions. Try to answer each prompt before flipping the card, then revisit any cards you miss until the explanation feels automatic.

Flashcard 1: What effect does a subsidy have on supply?

Answer: Increases supply. Government payment reduces production costs for suppliers.

Flashcard 2: Identify one result of government-imposed price floors.

Answer: Surplus in the market. Minimum prices above equilibrium create excess supply.

Flashcard 3: Identify a non-price determinant of supply.

Answer: Number of sellers. Market structure affects total production capacity available.

Flashcard 4: Which factor does NOT shift the supply curve?

Answer: Change in consumer preferences. Consumer preferences affect demand, not supply decisions.

Flashcard 5: Identify a non-price determinant of supply.

Answer: Number of sellers. Market structure affects total production capacity available.

Flashcard 6: What happens to supply if more firms exit the market?

Answer: Supply decreases. Fewer producers means reduced total market capacity.

Flashcard 7: What is producer surplus?

Answer: Difference between what producers are willing to accept and what they receive. Area above supply curve and below market price.

Flashcard 8: What is the impact of expectations of future price rise on current supply?

Answer: Current supply decreases. Producers withhold current supply hoping for higher future profits.

Flashcard 9: What is the supply curve's typical slope?

Answer: Upward sloping. Reflects the positive relationship between price and quantity supplied.

Flashcard 10: What is the main determinant of elasticity of supply?

Answer: Time period for adjustment. Longer adjustment periods allow greater supply response.

Flashcard 11: State the formula for supply function.

Answer: $Q_s = f(P)$ where $P$ is price and $Q_s$ is quantity supplied. Basic functional notation showing supply as dependent on price.

Flashcard 12: Which curve is affected by a change in production technology?

Answer: Supply curve. Technology improvements shift the entire supply relationship.

Flashcard 13: Identify the relationship between price and quantity supplied.

Answer: Direct relationship. Higher prices motivate greater production quantities.

Flashcard 14: Identify the effect of price ceilings on supply.

Answer: Can lead to shortages. Maximum prices below equilibrium discourage production.

Flashcard 15: State the effect of a tax on supply.

Answer: Decreases supply. Taxes increase production costs, reducing supply incentives.

Flashcard 16: What is the law of supply?

Answer: As price increases, quantity supplied increases; vice versa. This describes the fundamental positive relationship in supply theory.

Flashcard 17: How does supply respond to price in perfectly elastic supply?

Answer: Infinite response to price change. Any price change causes infinite quantity adjustment.

Flashcard 18: Which term describes a movement along the supply curve?

Answer: Change in quantity supplied. Movement along curve due to price changes only.

Flashcard 19: Name a factor that causes a change in quantity supplied.

Answer: Change in price. Price is the only factor causing movement along the curve.

Flashcard 20: State the formula for supply function.

Answer: $Q_s = f(P)$ where $P$ is price and $Q_s$ is quantity supplied. Basic functional notation showing supply as dependent on price.

Flashcard 21: Define market supply.

Answer: Sum of all individual supplies in a market. Horizontal addition of all individual firm supply curves.

Flashcard 22: What does a leftward shift in the supply curve signify?

Answer: A decrease in supply. Leftward movement means less quantity supplied at each price level.

Flashcard 23: How does an increase in input prices affect supply?

Answer: Decreases supply. Higher input costs reduce profitability and discourage production.

Flashcard 24: What is the result of improved production efficiency?

Answer: Increased supply. Better efficiency reduces costs and increases output capacity.

Flashcard 25: What does a vertical supply curve represent?

Answer: Perfectly inelastic supply. Fixed quantity regardless of price level changes.

Flashcard 26: How do expectations of future lower prices affect current supply?

Answer: Current supply increases. Producers rush to sell before prices drop further.

Flashcard 27: What does a rightward shift in the supply curve indicate?

Answer: An increase in supply. Rightward movement means more quantity supplied at each price level.

Flashcard 28: What does a leftward shift in the supply curve signify?

Answer: A decrease in supply. Leftward movement means less quantity supplied at each price level.

Flashcard 29: What does unitary elastic supply imply?

Answer: Percentage change in quantity supplied equals percentage change in price. Elasticity coefficient equals one in this balanced case.

Flashcard 30: What happens to supply if production costs decrease?

Answer: Supply increases. Lower costs make production more profitable, encouraging higher output.

Flashcard 31: Identify one result of government-imposed price floors.

Answer: Surplus in the market. Minimum prices above equilibrium create excess supply.

Flashcard 32: Identify the relationship between price and quantity supplied.

Answer: Direct relationship. Higher prices motivate greater production quantities.

Flashcard 33: What results from an increase in the number of producers?

Answer: Increase in supply. More market participants expand total productive capacity.

Flashcard 34: What is the effect of natural disasters on supply?

Answer: Decreases supply. External shocks disrupt production capacity and costs.

Flashcard 35: What is the impact of expectations of future price rise on current supply?

Answer: Current supply decreases. Producers withhold current supply hoping for higher future profits.

Flashcard 36: What does perfectly inelastic supply mean?

Answer: Quantity supplied does not change with price. Supply remains constant regardless of price changes.

Flashcard 37: Which term describes a movement along the supply curve?

Answer: Change in quantity supplied. Movement along curve due to price changes only.

Flashcard 38: What is the main determinant of elasticity of supply?

Answer: Time period for adjustment. Longer adjustment periods allow greater supply response.

Flashcard 39: Identify a factor that shifts the supply curve.

Answer: Production technology. Better technology reduces costs and increases productive capacity.

Flashcard 40: What does a perfectly elastic supply curve look like?

Answer: Horizontal line. Infinite elasticity appears as a flat horizontal line.

Flashcard 41: What is the effect of technological advancement on supply?

Answer: Increases supply. Innovation reduces costs and improves production efficiency.

Flashcard 42: What is the impact of tariffs on supply?

Answer: Decreases supply. Import taxes increase costs for foreign suppliers.

Flashcard 43: What is the impact of tariffs on supply?

Answer: Decreases supply. Import taxes increase costs for foreign suppliers.

Flashcard 44: Define market supply.

Answer: Sum of all individual supplies in a market. Horizontal addition of all individual firm supply curves.

Flashcard 45: Identify a factor that shifts the supply curve.

Answer: Production technology. Better technology reduces costs and increases productive capacity.

Flashcard 46: State the effect of a tax on supply.

Answer: Decreases supply. Taxes increase production costs, reducing supply incentives.

Flashcard 47: What is the effect of increased government regulation on supply?

Answer: Decreases supply. Compliance costs and restrictions reduce production efficiency.

Flashcard 48: Define elasticity of supply.

Answer: Measure of how much quantity supplied responds to price change. Responsiveness coefficient calculated as percentage changes ratio.

Flashcard 49: What is the effect of technological advancement on supply?

Answer: Increases supply. Innovation reduces costs and improves production efficiency.

Flashcard 50: What is the law of supply?

Answer: As price increases, quantity supplied increases; vice versa. This describes the fundamental positive relationship in supply theory.

Flashcard 51: Which curve is affected by changes in input prices?

Answer: Supply curve. Input costs directly affect production profitability decisions.

Flashcard 52: Which curve is affected by a change in production technology?

Answer: Supply curve. Technology improvements shift the entire supply relationship.

Flashcard 53: What happens to supply if production costs decrease?

Answer: Supply increases. Lower costs make production more profitable, encouraging higher output.

Flashcard 54: Which factor does NOT shift the supply curve?

Answer: Change in consumer preferences. Consumer preferences affect demand, not supply decisions.

Flashcard 55: Which curve is affected by changes in input prices?

Answer: Supply curve. Input costs directly affect production profitability decisions.

Flashcard 56: What does a rightward shift in the supply curve indicate?

Answer: An increase in supply. Rightward movement means more quantity supplied at each price level.

Flashcard 57: What happens to supply if more firms exit the market?

Answer: Supply decreases. Fewer producers means reduced total market capacity.

Flashcard 58: How does an increase in input prices affect supply?

Answer: Decreases supply. Higher input costs reduce profitability and discourage production.

Flashcard 59: Identify the effect of price ceilings on supply.

Answer: Can lead to shortages. Maximum prices below equilibrium discourage production.

Flashcard 60: What is the effect of natural disasters on supply?

Answer: Decreases supply. External shocks disrupt production capacity and costs.

Flashcard 61: How does supply respond to price in perfectly elastic supply?

Answer: Infinite response to price change. Any price change causes infinite quantity adjustment.

Flashcard 62: What does perfectly inelastic supply mean?

Answer: Quantity supplied does not change with price. Supply remains constant regardless of price changes.

Flashcard 63: What is the result of improved production efficiency?

Answer: Increased supply. Better efficiency reduces costs and increases output capacity.

Flashcard 64: What results from an increase in the number of producers?

Answer: Increase in supply. More market participants expand total productive capacity.

Flashcard 65: Define elasticity of supply.

Answer: Measure of how much quantity supplied responds to price change. Responsiveness coefficient calculated as percentage changes ratio.

Flashcard 66: What does a vertical supply curve represent?

Answer: Perfectly inelastic supply. Fixed quantity regardless of price level changes.

Flashcard 67: How do expectations of future lower prices affect current supply?

Answer: Current supply increases. Producers rush to sell before prices drop further.

Flashcard 68: What happens to supply if a new firm enters the market?

Answer: Supply increases. More producers means greater total market capacity.

Flashcard 69: What does unitary elastic supply imply?

Answer: Percentage change in quantity supplied equals percentage change in price. Elasticity coefficient equals one in this balanced case.

Flashcard 70: Name a factor that causes a change in quantity supplied.

Answer: Change in price. Price is the only factor causing movement along the curve.

Flashcard 71: What happens to supply if a new firm enters the market?

Answer: Supply increases. More producers means greater total market capacity.

Flashcard 72: What is the effect of increased government regulation on supply?

Answer: Decreases supply. Compliance costs and restrictions reduce production efficiency.

Flashcard 73: What is the supply curve's typical slope?

Answer: Upward sloping. Reflects the positive relationship between price and quantity supplied.