Causes of Supply Curve Shifts

The lecture covers the causes of shifts in the supply curve, focusing on cost of production, technological changes, exogenous factors, and government intervention through taxes and subsidies. It explains how each factor can cause inward or outward shifts in the supply curve, using examples like labor costs, fuel efficiency, climate conditions, and taxation types. The lecture aims to equip students with the ability to identify and analyze these shifts diagrammatically.

What is the primary focus of Unit 2 in the lecture?

• Market equilibrium

• Consumer behavior

• Demand curve analysis

• Supply curve analysis

Which of the following is NOT a factor that can cause a shift in the supply curve?

• Cost of production

• Government subsidies

• Technological advancements

• Changes in consumer preferences

How does an increase in production costs affect the supply curve?

• Causes an outward shift

• Causes an inward shift

• Leaves the supply curve unchanged

• Causes a rotational shift

What is an example of an exogenous factor that can shift the supply curve?

• Climate conditions

• Change in consumer income

• Advertising campaigns

• Introduction of a new product

How do government subsidies affect the supply curve?

• Shift the supply curve inwards

• Shift the supply curve outwards

• Have no effect on the supply curve

• Cause a rotational shift

What is the difference between direct and indirect taxation?

• There is no difference between direct and indirect taxes

• Direct taxes are paid by businesses, indirect taxes by individuals

• Direct taxes are paid directly to the government, indirect taxes are not

• Indirect taxes are paid directly to the government, direct taxes are not

Which type of tax causes a rotational inward shift in the supply curve?

• Ad valorem tax

• Corporate tax

• Unit tax

• Income tax