Supply Warm Ups Unit 2

Scenerio 1: You own a Panera. You think you can sell a cookie for $.25 a cup. You can sell a cup of coffee for $4.75 a cup. Which item will you put more effort into selling?

Scenario 2 You’re selling coffee. You think you can sell it for $.25 a cup. What if you could sell it for $4.75 a cup? At which price point are you going to put in more effort?

2/28/13: Graph: Change in Quantity Supplied or Change in Supply Jeans are selling for a higher price (jeans). Corn farmers hear that corn is selling for a higher price so they decide to start growing corn too(corn). Paper has become more expensive (books).

Supply of Jeans S Price B A Quantity Increase in Quantity Supplied (due to a price change)

Supply of Corn S1 S2 Price Quantity Increase in Supply --- # of sellers Quantity

Supply of Books S2 S1 Price Quantity Decrease in Supply --- Cost of Resources Quantity

3/1/13: The government tells Toyota that their Camry does not have enough safety air bags. (Camry) The government has given subsidies to local wheat farmers (wheat).

Supply of Toyota Camry S2 S1 Price Quantity Decrease in Supply ---Government Regulation Quantity

Supply of Wheat S1 S2 Price Quantity Increase in Supply ---Government Subsidy Quantity

3/4/13: A cell phone company who sells Blackberry flip phones hears on the news that researchers found them to be hazardous to a persons health. (Blackberry flip phones) The price of cotton has increased (cotton T-Shirts).

Supply of Flip Phones S2 S1 Price Quantity Decrease in Supply ---Expectations *It’s not Gov. Regulations b/c the scenario doesn’t mention the Government or regulations. Quantity

Supply of Cotton T-Shirts S2 Price Decrease in Supply ---Cost of Resources *It isn’t asking about the supply of cotton. The scenario asks what happens to T-Shirts that need cotton to be made. Quantity

3/4/13: Summer is approaching, so soon customers will be ready to buy swimsuits (swimsuits). Workers in a shoe factory have all come down with the flu and called off of work for 3 days (shoes).

Supply of Swimsuits S1 S2 Price Quantity Increase in Supply ---Producer Expectations Quantity

Supply of Shoes S2 S1 Price Quantity Increase in Supply ---Productivity Quantity

3/4/13: The price of televisions has increased (supply of televisions).

Supply of Televisions S Price B A Quantity Increase in Quantity Supplied (due to a price change)

3/4/13: The price of televisions will decrease in two months (supply for televisions).

Supply of Televisions Price D2 D1 Quantity Decrease in Supply *Expectations for future prices Price D1 Quantity