ECON 262

Practice Problems -- The Supply Curve

Graphically show what will happen in each case (to supply or quantity supplied).  Remember to always assume ceteris paribus unless otherwise noted. Make sure you label your axes correctly !!

1.  Assume plastic is used to make Tupperware.  What will happen to the supply or quantity supplied of Tupperware if the price of plastic decreases?

2.  Assume a new technology is developed in producing radios.  What will happen to the supply or quantity supplied of radios?

3.  Assume the wages of carpenters increases.  What will happen to the supply or quantity supplied of houses? (Hint:  carpenters make houses).

4.  Assume black pens and green pens are substitutes in production.  What will happen to the supply or quantity supplied of black pens if the price of green pens increases?

5.  Assume lumber and wood chips used in gardens are complements in production.  What will happen to the supply or quantity supplied of wood chips if the price of lumber decreased?

6.  Assume the price of telephones increases.  What will happen to the supply or quantity supplied of telephones?

7.  Assume lemons are used to produce lemon pie.  Also assume that lemon pies and cherry pies are a substitutes in production.  What will happen to the supply or quantity supplied of lemon pies if the price of lemons increased and at the same time, the price of cherry pies increased?

8.  Assume a new technology is developed in the production of calculators.  Also assume that plastic is used to produce calculators.  What will happen to the supply or quantity supplied of calculators if the technology takes place and at the same time the price of plastic increases?