Supply Practice Problem Answers:
*Before reading the answers make sure you work the problems first.*
1. If Apple Computers developed new technology that will speed up their production levels, then they would be able to produce more. Therefore, there would be an increase in Supply.
2. If farmers are expecting a bad season next year, they would probably want to make as much money as they could this year. Therefore, they would plant more now; increasing the Supply.
3.Once again be careful with this one. If the were asking about the price of a product or service by itself; then it's not a shifter. In this case we are talking about a change in Quantity Supplied (the amount the seller is willing to sell). Graphically the curve doesn't move, and we're just going to move upwards on the supply curve showing an increase in price. We notice that the supplier wants to sell more, verifying the Law of Supply:
4. With a multitude of new restaurants in the area, the amount of fast-food available to the citizens has increase. Therefore, the production of fast food increases; (Supply increases)
5. If the cost of your raw materials to make benches goes up, then your production will begin to decline. Therefore, the supply of picnic benches will decrease.
6. Remember that you need to find the Supply Price first (Which in this case would be $2.50) Remember that the supply curve NEVER starts from the origin. Here it is graphically:
