JC H1 and H2 Economics Study Notes – 4. Theory of Supply


We now turn to the Theory of Supply, as part of Theme 2: Markets, to see how producers behave. Afterwards, we will be able to understand and analyse how market forces of DD and supply (SS) interact to bring about market equilibrium (aka Market Mechanism).

There is no government involvement in a free market.  It is the interaction of Supply (SS) and supply (SS) forces that determine the prices of the goods and services. The consumers Supply finished goods for consumption whereas the producers/firms supply the goods for profits. Changes in DD and SS will cause changes in the market price and in turn, influences the way in which the economy allocates its resources. This is still part of the price mechanism, assuming that individual buyers and suppliers are motivated by self-interest and that the “invisible hand” of the market guides this self-interest into promoting economic well being. Previously we have seen how consumers behave. Now, let’s examine clearly how suppliers conduct themselves in a market.
(Unless you are a seller right now, you will find that it is slightly harder to understand Producer Theory. It’s alright, just be patient. Or join our 
live online Econs tuition.)

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We at Adam Smith Economics Tuition, have compiled a complete set of JC notes for students doing H1 & H2 Econs, for the latest syllabus of 8823 and 9757 respectively. We have painstakingly referred to the following varied sources:, which are recommended by SEAB as approved textbooks. Thus, we have done the reading and compilation, so you don’t have to! (Note: Those in italics mean they are referred to more than the rest. Note also that, we did not highlight the specific edition too, any edition in the past 10 years or so will suffice.)

1. Economics Today, by Miller, Roger
2. Economics, by Parkin, Michael 
3. Economics, by Sloman, John, Wride, Alison and Garratt, Dean 
4. Microeconomics: Principles, Problems and Policies, by McConnell, Campbell R and Brue, Stanley
5. The Economic Way of Thinking, by Heyne, Paul, Boettke, Peter and Prychitko, David
6. Economics, by Lipsey, Richard G and Chrystal, K Alec
7. Principles of Economics, by Mankiw, N Gregory Principles of Economics
8. A Microeconomics: A Contemporary Introduction, by McEachern, William
9. A Macroeconomics: A Contemporary Introduction, by McEachern, William

On top of the above textbooks, we did take the best remaining sections from selected junior colleges (DHS, HCI…) and put up this lecture notes set, completely FREE.


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