Question

When a non-price factor changes--such as technology, expectations, prices of related goods, prices of inputs, or the number of sellers, there is a change in:
(a) Quantity supplied and the entire curve shifts.
(b) Supply, but the curve does not shift.
(c) Quantity supplied and the supply curve does not shift.
(d) Supply and the entire curve shifts.

When there is a change in the amount firms produce due to a change in price, this is referred to as a change in:
(a) Supply, but the curve does not shift.
(b) Quantity supplied and the entire curve shifts.
(c) Supply and the entire curve shifts.
(d) Quantity supplied and the supply curve does not shift.

Answer 1

Answer:

The answers are:

1. D) Supply and the entire curve shifts.
2. D) Quantity supplied and the supply curve does not shift.

Explanation:

1. When non price factors (that affect the supply of a product) change, then the whole supply curve shifts and the quantity supplied will vary.

For example, new machinery that produces goods in a more efficient way, will shift the entire supply curve to the right. Suppliers will be able to produce more goods at the same costs.

2. A change in the amount of goods produced due to a change in price, is a change in the quantity supplied of that product. Suppliers will produce more goods at higher prices. But those changes in the quantity supplied happen follow the supply curve.