AP MACRO Supply: NICEJAG

Acronym

N-

natural/manmade phenomenon

• weather, natural disasters, wars

I-

input costs

• prices of raw materials ↑ price goes ↓

• changes in technology efficiency gains

• losses

• government policies

C-

competition

• fewer producers = less supply or ↑ producers ↑ supply

E-

expectations of future price changes

• expect prices ↑ , supply ↓ (and vice versa)

J-

joint-supply profitability

• supply of beef ↑, supply of leather (also from cows) ↑

• wheat ↑ straw ↑

A-

alternative goods in supply

• wheat $ ↑ (profit) instead of soybeans, so soybean production ↓

G-

governmental factors

• increased regulation

• decreased regulation ↓ costs ↑ supply

• subsidies ↑ firm profitability, firms supply more

• ↑ taxes ↓ supply