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Supply
UNIT 3: CHAPTER 5
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NOTES 11/5
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The amount of a product that would be offered for sale at all
possible prices
SUPPLY
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Suppliers will normally offer more for sale at high prices and less at lower
prices.
LAW OF SUPPLY
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Graph showing the various quantities
supplied at each and every price
that might prevail in the
market.
SUPPLY CURVE
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Listing of the various
quantities of a particular
product supplied at all possible prices in the
market.
SUPPLY SCHEDULE
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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
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Amount that producers bring to market at any given price.
QUANTITY SUPPLIED
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Government payment to an individual, business, or other
group to encourage or protect a certain type of economic activity.
SUBSIDY
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Change in amount offered for sale in response to a change in price.
CHANGE IN QUANTITY SUPPLIED
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Suppliers offer different amounts of products for sale at all possible prices in the
market.
CHANGE IN SUPPLY
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Cost of inputsProductivityTechnologyTaxes and subsidiesExpectationsGovernment RegulationsNumber of Sellers
FACTORS THAT CAUSE A CHANGE IN SUPPLY PAGE
116
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1. CREATE A GOOGLE DOC TITLE
ECON: SUPPLY FACTORS
2. CHOOSE 2 FACTORS
SUMMARIZE AND PROVIDE ONE EXAMPLE
PARTNERWORK
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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
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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
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• Firms can adjust to new prices quickly=
• Elastic• Firm takes longer to adjust to new
prices=• Inelastic
SUPPLY ELASTICITY
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• If quantities are being purchased• Demand Elasticity
• If quantities are being sold:• Supply Elasticity
DEMAND ELASTICITY VS SUPPLY ELASTICITY
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Complete question 3, 4, and 5,
PAGE 120
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CHAPTER 5: SECTION 2
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• 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
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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
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In the short run, output will change as one input is varied while the others are held constant.
LAW OF VARIABLE PROPORTIONS
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Describes the relationship between changes in output to different amounts of a single input while other inputs are held constant.
PRODUCTION FUNCTION
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Total product: Total output produced by the firm.
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Extra output or change in total product caused by the addition of one
more unit of variable input.
MARGINAL PRODUCT
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• 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
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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