ib-economics-quantitative

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SUPPLY FUNCTIONSYou need to be able to: Explain a supply function (equation) of the form Qs = c + dP.Plot a supply curve from a linear function (eg, Qs = –30 + 20 P).Outline why, if the “c” term changes, there will be a shift of the supply curve.Outline why, if the “d” term changes, the slope of the supply curve will change.How to plot / draw the supply curve from a supply function(Using the example Q S = 150 + 150P)Follow the steps:1. Find the quantity supplied when the price is zero. This will be the „c‟ value. In theexample, it is 150 units. This gives one point on the supply curve, known as the x-intercept. In this case, it is the point (150,0), where 150 units are supplied at a priceof $0. (It might be a point with a negative quantity and a price of zero, if „c‟ isnegative.)2. Choose a price above zero. (In IB questions, you will be given the range of pricevalues that you are to consider, so you can choose one of the prices given.) Put itinto the equation instead of P, in order to get a quantity supplied at that price. In theexample, we could choose a price of $1. We get Q S = 150 + (150 x 1) = 150 + 150 =300. So, you now have another point on the supply curve, in the example, it is(300,1).3. Draw your axes for the market on a piece of graph paper and insert values for priceand quantity. (In IB exams, the axes will already have values on, but not labels.4. Insert the two points that you have calculated. For our example, this is shown belowleft:5. Now extend the line upwards. For our example, this is shown above right.6. Label the axes and the supply curve. You have done it!Produced by Ian Dorton & Jocelyn Blink Page 6
Now you have a go!Question 1.2On the axes below, plot the following linear supply functions:a. Q s = 20 + 4Pb. Q s = -20 + 4Pc. Q s = 4Pd. Q s = 120 + 6PHave you fully labelled the axes?Produced by Ian Dorton & Jocelyn Blink Page 7
Page 1 and 2: IB HIGHER LEVEL ECONOMICSQUANTITATI
Page 3 and 4: Topic 1 - Linear Demand and Supply
Page 5: Have you fully labelled the axes?Ex
Page 9 and 10: Question 1.5On the graphs below, pl
Page 11 and 12: Topic 2 - ElasticitiesPrice Elastic
Page 13 and 14: Cross Elasticity of Demand (XED)You
Page 16 and 17: Topic 3 - Specific Taxes and Subsid
Page 18 and 19: Now you have a go!Question 3.1In th
Page 20 and 21: Substitute $4 as P in either equati
Page 22 and 23: SUBSIDIESPlot demand and supply cur
Page 24 and 25: The original producer surplus was t
Page 26 and 27: 2400 = 600PP = $4Substitute $4 as P
Page 28 and 29: Topic 4 - Price ceilings and price
Page 30 and 31: Now you have a go!Question 4.1In th
Page 32 and 33: Step 3Calculate from the diagram th
Page 34 and 35: Marginal product =In the table abov
Page 36 and 37: E.g. The firm below has revenues ba
Page 38 and 39: E.g.(2) The firm below has the foll
Page 40 and 41: ) Firm BQuantity Price AVC ATC300 $
Page 42 and 43: Produced by Ian Dorton & Jocelyn Bl
Page 44 and 45: Topic 12 - Comparative AdvantageYou
Page 46 and 47: Now you have a go!!Question 12.1Usi
Page 48 and 49: 1. Add the world supply curve if fo
Page 50 and 51: 3. Calculate the amount of revenue
Page 52 and 53: Now you have a go!!Question 13.1In
Page 54 and 55: Question 13.3In the market for bott
Page 56 and 57:
i. Make a table to show the demand
Page 58 and 59:
Topic 15 - Balance of paymentsYou n
Page 60 and 61:
Question 15.1An extract from the ba
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