a. List factors that can cause an increase in supply. (20) 1. b. How do increase in income affect demand?Draw a graph.

a. Factors that can cause an increase in supply include:<br />1. Technological advancements: Improvements in technology can increase the efficiency of production, leading to an increase in supply.<br />2. Decrease in production costs: A reduction in the cost of production, such as a decrease in the cost of raw materials or labor, can increase supply.<br />3. Increase in the number of producers: If more producers enter the market, the total supply of a good or service can increase.<br />4. Government policies: Policies such as subsidies, tax breaks, or deregulation can encourage an increase in supply.<br />5. Expansion of production capacity: If a producer increases their production capacity, they can produce more goods or services, leading to an increase in supply.<br /><br />b. An increase in income generally leads to an increase in demand for goods and services. This is because as people have more disposable income, they likely to purchase goods and services, leading to an increase in demand.<br /><br />Here is a graph that illustrates the relationship between income and demand:<br /><br />[Graph showing the demand curve shifting to the right as income increases]<br /><br />As income increases, the demand curve shifts to the right, indicating an increase in demand for goods and services.