Supply

UNIT 3: CHAPTER 5

NOTES 11/5

The amount of a product that would be offered for sale at all

possible prices

SUPPLY

Suppliers will normally offer more for sale at high prices and less at lower

prices.

LAW OF SUPPLY

Graph showing the various quantities

supplied at each and every price

that might prevail in the

market.

SUPPLY CURVE

Listing of the various

quantities of a particular

product supplied at all possible prices in the

market.

SUPPLY SCHEDULE

Supply curve that shows the quantities offered at various prices by

all firms that offer the product for sale in a given market.

MARKET SUPPLY

Amount that producers bring to market at any given price.

QUANTITY SUPPLIED

Government payment to an individual, business, or other

group to encourage or protect a certain type of economic activity.

SUBSIDY

Change in amount offered for sale in response to a change in price.

CHANGE IN QUANTITY SUPPLIED

Suppliers offer different amounts of products for sale at all possible prices in the

market.

CHANGE IN SUPPLY

Cost of inputsProductivityTechnologyTaxes and subsidiesExpectationsGovernment RegulationsNumber of Sellers

FACTORS THAT CAUSE A CHANGE IN SUPPLY PAGE

116

1. CREATE A GOOGLE DOC TITLE

ECON: SUPPLY FACTORS

2. CHOOSE 2 FACTORS

SUMMARIZE AND PROVIDE ONE EXAMPLE

PARTNERWORK

1. What are the factors of production? • Land, labor, capital

2. According to the Law of Supply, will suppliers offer more or less for sale at a higher price. Explain.

Write complete sentences and be ready to share.

More

11/6 DO NOW

Measure of the way in which quantity supplied responds to a change in

price.

AKA: Deals with how much does a change in price affect the supply.

SUPPLY ELASTICITY

• Firms can adjust to new prices quickly=

• Elastic• Firm takes longer to adjust to new

prices=• Inelastic

SUPPLY ELASTICITY

• If quantities are being purchased• Demand Elasticity

• If quantities are being sold:• Supply Elasticity

DEMAND ELASTICITY VS SUPPLY ELASTICITY

Complete question 3, 4, and 5,

PAGE 120

CHAPTER 5: SECTION 2

• Output: What firms produce• Input: What firms need to produce. Factors of

Production. • Raw materials: natural resources• Variable: Something that can change

EX: Labor: The number of worker a firm has can change from one day to the next

• Constant: Something that stays the same

TERMS TO KNOW

The relationship between the factors of production and the output of goods and services.

Short run a period of production that allows producers to change only the amount of the variable input called labor. Long run, a period of production long enough for producers to adjust the quantities of all their resources, including capital.

THEORY OF PRODUCTION

In the short run, output will change as one input is varied while the others are held constant.

LAW OF VARIABLE PROPORTIONS

Describes the relationship between changes in output to different amounts of a single input while other inputs are held constant.

PRODUCTION FUNCTION

Total product: Total output produced by the firm.

Extra output or change in total product caused by the addition of one

more unit of variable input.

MARGINAL PRODUCT

• Increasing returns, diminishing returns, and negative returns

• Based on the way marginal product changes as the variable input of labor is changed.

THREE STAGES OF PRODUCTION

1. Create a chart that summarizes the three stages of production (page 125). It must include:

a. Summary of each stage

b. A picture that includes a boss and worker

2. Page 120 Complete question 3, 4, and 5,

CLASSWORK