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by Mr. Silva and Ms. Liu. For example, at a price of $2 per board foot, Mr. Silva supplies
30,000 board feet of lumber per year and Ms. Liu supplies 20,000 board feet per year,
making the quantity supplied to the market 50,000 board feet.
Clearly, the quantity supplied to the market at any given price is larger with Ms. Liu
present than it would be if Mr. Silva were the only supplier. The quantity supplied at a
given price would be even larger if we added a third producer, then a fourth, and so on.
So an increase in the number of producers leads to an increase in supply and a right-
ward shift of the supply curve.

Adventures in
®
AP Economics
Module 1.5 Review Watch the video:
Supply

Check Your Understanding

1. Explain whether each of the following events represents e. Since new technologies have made it possible to
(i) a change in supply (a shift in the supply curve) or (ii) a build larger cruise ships (which are cheaper to run
movement along the supply curve (a change in the quantity per passenger), Caribbean cruise lines have offered
supplied). more cabins, at lower prices, than before.
a. During a real estate boom that causes home prices to 2. After each of the following events, will the supply curve
rise, more homeowners put their homes up for sale. for the good that is mentioned shift to the left, shift to
b. Many strawberry farmers open temporary roadside the right, or remain unchanged?
stands during harvest season, even though prices are a. The coffee berry borer beetle destroys large
usually low at that time. quantities of coffee berries.
c. Immediately after the school year begins, fewer b. Consumers demand more bike helmets than ever.
young people are available to work. Fast-food chains c. The number of tea producers increases.
must raise wages, which represent the price of labor, d. The price of leather, an input in wallet production,
to attract workers. increases.
d. Many construction workers temporarily move to
areas that have suffered hurricane damage, lured by
higher wages.

®
Tackle the AP Test: Multiple-Choice Questions

1. The law of supply states that the relationship between 3. Which of the following will decrease the supply of rice?
price and quantity supplied is a. There is a technological advance that affects the
a. positive. production of all goods.
b. negative. b. The price of rice falls.
c. indirect. c. The price of corn (which consumers regard as a
d. unclear. substitute for rice) decreases.
e. weak. d. The wages of workers producing rice increase.
2. Because the market supply curve is the sum of e. The demand for rice decreases.
individual producers’ supply curves, an increase in 4. An increase in the demand for steak, which increases the
the number of producers will cause which of the price of steak, will lead to an increase in which of the
following? following?
a. the supply curve to shift to the left a. the supply of steak
b. the supply curve to shift to the right b. the supply of hamburger (a substitute in production)
c. a movement to the right along the supply curve c. the supply of chicken (a substitute in consumption)
d. a movement to the left along the supply curve d. the supply of leather (a complement in production)
e. the supply to decrease e. the demand for leather

44 Macro • Unit 1 Basic Economic Concepts
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