Allocation of Resources · 4 question types
Past paper frequency (2018 to 2024)
This topic accounts for approximately 18% of your exam marks.
Supply appears alongside demand on virtually every paper; cost changes, technology, and taxes/subsidies are the most tested supply shifters.
| Movement along the supply curve | Shift of the supply curve | |
|---|---|---|
| What changes? | The good's own price | Any non-price factor (costs, technology, taxes, subsidies, number of firms, expectations, other-good prices, weather) |
| What does the curve do? | Stays put | Moves to a new position |
| What do we call the change? | Extension (price ↑) or contraction (price ↓) | Increase in supply (rightward) or decrease in supply (leftward) |
| What changes on the diagram? | The point on the curve | The whole curve |
| Vocabulary | "change in quantity supplied" | "change in supply" |
Example — Distinguish a movement along a supply curve from a shift of a supply curve. (3 marks)
A full-mark answer covers all three components: