2.4

Supply

Cambridge IGCSE Economics (0455)  · Unit 2: The allocation of resources  · 9 flashcards

Supply is topic 2.4 in the Cambridge IGCSE Economics (0455) syllabus , positioned in Unit 2 — The allocation of resources , alongside Microeconomics and macroeconomics, The role of markets and Demand.  In one line: Supply refers to the quantity of a good or service that producers are willing and able to offer for sale at a given price in a given period. It reflects the sellers' intentions, not necessarily the quantity actually sold.

This topic is examined in Paper 1 (multiple-choice) and Paper 2 (structured questions, including data-response items).

The deck below contains 9 flashcards — 2 definitions, 3 key concepts and 4 application cards — covering the precise wording mark schemes reward.  Use the 2 definition cards to lock down command-word answers (define, state), then move on to the concept and application cards to handle explain, describe and compare questions.

Key definition

'supply' in economics

Supply refers to the quantity of a good or service that producers are willing and able to offer for sale at a given price in a given period. It reflects the sellers' intentions, not necessarily the quantity actually sold.

Questions this Supply deck will help you answer

Definition Flip

Define 'supply' in economics.

Answer Flip

Supply refers to the quantity of a good or service that producers are willing and able to offer for sale at a given price in a given period. It reflects the sellers' intentions, not necessarily the quantity actually sold.

Key Concept Flip

Explain the 'law of supply'.

Answer Flip

The law of supply states that, all other things being equal (ceteris paribus), as the price of a good or service increases, the quantity supplied will also increase, and vice versa. This is because higher prices incentivize producers to supply more.

Key Concept Flip

What is the difference between a 'movement along' and a 'shift' of the supply curve?

Answer Flip

A 'movement along' the supply curve is caused by a change in the price of the good itself, leading to a change in quantity supplied. A 'shift' of the supply curve is caused by a change in any determinant of supply other than price, affecting the entire supply schedule.

Definition Flip

List four determinants of supply (other than price).

Answer Flip

Determinants of supply include: costs of production (

Example: wages, raw materials), technology, government policies (taxes and subsidies), and the number of sellers in the market. Expectations about future prices also affect current supply.
Key Concept Flip

How does an increase in the cost of production affect the supply curve?

Answer Flip

An increase in the cost of production (

Example: higher wages) will decrease supply. This shifts the supply curve to the left, indicating that producers are willing and able to supply less at each price level.
Key Concept Flip

Explain how improved technology can affect supply.

Answer Flip

Improved technology typically reduces the cost of production, allowing firms to produce more output with the same inputs. This increases supply, shifting the supply curve to the right.

Key Concept Flip

What is a subsidy, and how does it affect supply?

Answer Flip

A subsidy is a government payment to producers, reducing their costs of production. Subsidies increase supply, shifting the supply curve to the right because producers are willing to supply more at each price level.

Key Concept Flip

How does an increase in taxes on production affect the supply curve?

Answer Flip

An increase in taxes on production (

Example: VAT) increases the cost of production for firms. This decreases supply, shifting the supply curve to the left.
Key Concept Flip

Distinguish between 'supply' and 'quantity supplied'.

Answer Flip

'Supply' refers to the entire relationship between price and the quantity of a good or service that firms are willing and able to offer for sale. 'Quantity supplied' is the specific amount of a good or service firms will offer at a given price.

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Take Economics Quiz
2.3 Demand 2.5 Price determination

Key Questions: Supply

Define 'supply' in economics.

Supply refers to the quantity of a good or service that producers are willing and able to offer for sale at a given price in a given period. It reflects the sellers' intentions, not necessarily the quantity actually sold.

List four determinants of supply (other than price).

Determinants of supply include: costs of production (

Example: wages, raw materials), technology, government policies (taxes and subsidies), and the number of sellers in the market. Expectations about future prices also affect current supply.

More topics in Unit 2 — The allocation of resources

Supply sits alongside these Economics decks in the same syllabus unit. Each uses the same spaced-repetition system, so progress in one informs the next.

2.1 Microeconomics and macroeconomics

9 flashcards
2.2 The role of markets

8 flashcards
2.3 Demand

9 flashcards
2.5 Price determination

9 flashcards
2.6 Price elasticity of demand

10 flashcards
2.7 Price elasticity of supply

9 flashcards
2.8 Market economic system

9 flashcards
2.9 Market failure

9 flashcards
2.10 Mixed economic system

10 flashcards

Cambridge syllabus keywords to use in your answers

These are the official Cambridge 0455 terms tagged to this section. Mark schemes credit responses that use the exact term — weave them into your answers verbatim rather than paraphrasing.

supply supply curve law of supply quantity supplied shift movement determinants cost of production technology subsidy tax

Key terms covered in this Supply deck

Every term below is defined in the flashcards above. Use the list as a quick recall test before your exam — if you can't define one of these in your own words, flip back to that card.

'supply' in economics
List four determinants of supply (other than price)

How to study this Supply deck

Start in Study Mode, attempt each card before flipping, then rate Hard, Okay or Easy. Cards you rate Hard come back within a day; cards you rate Easy push out to weeks. Your progress is saved in your browser, so come back daily for 5–10 minute reviews until every card reads Mastered.