Supply and Demand Concepts

The video tutorial explains the supply curve, illustrating how suppliers decide the quantity of goods to supply at various prices. It uses oil as an example, showing that as prices increase, more suppliers can profitably enter the market, leading to a greater quantity supplied. The video also discusses the varying costs of oil extraction in different regions and how these costs influence market dynamics. The supply curve's upward slope is explained as a result of exploiting higher-cost sources as prices rise. The video concludes by hinting at the next topic, equilibrium, and offers practice questions for viewers.

What does a supply curve illustrate?

• The cost of producing a good.

• The amount of a good suppliers are willing to supply at different prices.

• The amount of a good consumers are willing to buy at different prices.

• The relationship between supply and demand.

What happens to the quantity of oil supplied as the price increases?

• It fluctuates randomly.

• It increases.

• It remains the same.

• It decreases.

At a price of $20 per barrel, how many barrels of oil are supplied per day?

• 50 million barrels

• 5 million barrels

• 25 million barrels

• 10 million barrels

Why is it easier to extract oil in Saudi Arabia compared to the US?

• Saudi Arabia has more oil reserves.

• The oil in Saudi Arabia is closer to the surface.

• The oil in the US is of lower quality.

• The US has stricter regulations.

What is the cost of extracting oil in Saudi Arabia?

• $20 per barrel

• $2 per barrel

• $5 per barrel

• $10 per barrel

Which of the following locations has the highest extraction cost for oil?

• Nigeria

• Gulf Coast oil rig

• Saudi Arabia

• Russia

What happens to suppliers with higher extraction costs as the price of oil increases?

• They exit the market.

• They become profitable and enter the market.

• They reduce their production.

• They merge with other companies.

Why does the supply curve slope upward?

• Because the government regulates the supply.

• Because suppliers want to sell less at higher prices.

• Because demand decreases as price increases.

• Because suppliers can only increase quantity by exploiting higher cost sources.

What does the supply curve summarize?

• The relationship between supply and demand.

• The way consumers respond to a change in price.

• The cost of production.

• The way suppliers respond to a change in price.

What topic will be covered in the next video?

• Market Structures

• Supply Chain Management

• Demand Curve

• Equilibrium