Economics Bell Ringer Tuesday, 01/24/ Supermarkets, like Jewel, make a profit of only 3 to 6 cents for every dollar of revenue they earn. Where does the rest of the money go? (Note: revenue is how much they sold) UPDATE YOUR TABLE OF CONTENTS #1 – 01/24/2012 – Table of Contents (2 nd Semester)#1 – 01/24/2012 – Table of Contents (2 nd Semester) #2 – 01/24/2012 – Bell Ringer (1/23-1/26)#2 – 01/24/2012 – Bell Ringer (1/23-1/26) #3 – 01/24/2012 – Notes Ch 5.2#3 – 01/24/2012 – Notes Ch 5.2 #4 – 01/24/2012 – Cost of Business Cartoon#4 – 01/24/2012 – Cost of Business Cartoon

Economics Bell Ringer Wednesday, 01/25/ Identify the differences between fixed and variable costs 2.Pick a business and identify three fixed and three variable costs 3.What does thinking at the margin mean? UPDATE YOUR TABLE OF CONTENTS #5 – 01/25/2012 – Production Decisions HW#5 – 01/25/2012 – Production Decisions HW Fixed Costs: Costs you pay no matter how much you sell (can’t get around them, regardless of how your business is doing) Variable Costs: Costs you pay to produce the next unit you sell Considering the benefit or cost of the next unit of consumption or production

Economics Bell Ringer Monday, 01/30/2012 UPDATE YOUR TABLE OF CONTENTS #6 – 01/30/2012 – Bell Ringer (1/31-2/02)#6 – 01/30/2012 – Bell Ringer (1/31-2/02) 1.Identify the difference between increasing and decreasing marginal returns to labor 2.How are variable cost and marginal cost related? Marginal Returns to Labor = how much extra output you get from hiring one more worker or working one more hour Increasing Marginal Returns: We get more output for each worker because of the benefit of specialization. This is associated with decreasing marginal costs Decreasing Marginal Returns: We get less output for each worker because of wasted resources (workers) and limited capital. This is associated with increasing marginal costs Variable cost is the total or sum of marginal costs. Marginal cost is the extra cost of producing one more unit.

Economics Bell Ringer Monday, 01/30/2012 UPDATE YOUR TABLE OF CONTENTS #6 – 01/30/2012 – Bell Ringer (1/31-2/02)#6 – 01/30/2012 – Bell Ringer (1/31-2/02) 1.How do you calculate total costs? 2.Which costs will change: variable, total or fixed? 3.What does marginal revenue equal?

Economics Bell Ringer Tuesday, 01/31/2012 UPDATE YOUR TABLE OF CONTENTS #7 – 1/31/2012 – Notes 5.3#7 – 1/31/2012 – Notes As output, or production, is increasing: a)Fixed costs first decrease, then increase b)Variable costs remain constant c)Marginal costs first decrease, then increase d)Marginal costs first increase, then decrease 2.A profit-maximizing firm would continue to supply a good if (select as many as are true) a)Price is less than Total Cost b)Marginal Revenue is equal to Marginal Cost c)Price is greater than Marginal Cost d)Marginal Revenue is less than Marginal Cost B, C Remember, Price and Marginal Revenue are equal to each other when we are price-taking firms Our profit-maximizing output is where MR = MC Always think at the margin

Economics Bell Ringer Tuesday, 01/31/2012 Oil Changes per Hour Fixed Cost Variable Cost Total Cost Marginal Cost Marginal Revenue Total Revenue Profit 5$20$35 $13 6$20$48 $13 7$20$62 $13

Economics Bell Ringer Wednesday, 02/01/2012 UPDATE YOUR TABLE OF CONTENTS #8 – 2/01/2012 – Offshore Oil Drilling Handout#8 – 2/01/2012 – Offshore Oil Drilling Handout 1.Identify whether the following affects supply through the law of supply or through a shift in supply. Identify if a shift to the right or to the left: a)Grocery stores pay higher costs for milk as farmers are charging more. Will grocery stores supply more or less milk on the shelves? b)The government provides a subsidy to companies that grow corn. Will corn farmers supply more or less corn to grocery stores? c)The price of gasoline goes up in the Uptown neighborhood. Will a gas station supply more or less gas? d)An engineering firm invests in new computers and internet technology for everyone. The increased efficiency lowers the marginal cost of production. Will the firm supply more or less consulting services? Grocery stores will supply less milk because of higher costs. This causes a shift in supply to the left. Farmers will supply more corn because a subsidy decreases costs. This causes a shift in supply to the right. Gas stations will supply more gasoline. This is a result of the law of supply The firm will supply more services since they are more productive and have lower marginal costs. This causes a shift in supply to the right.

Economics Bell Ringer Monday February 6, 2012 Identify the Key Term: 1.Producers offer more of a good as its price increases and less as its price falls 2.The additional income from selling one more unit of a good; sometimes equal to price 3.A level of production in which the marginal product of labor increases as the number of workers increases 4.The change in output from hiring one additional unit of labor 5.The cost of producing one more unit of a good 6.Government intervention in a market that affects the production of a good a)Increasing marginal returns b)Decreasing marginal returns c)Law of supply d)Law of demand e)Variable cost f)Marginal cost g)Fixed cost h)Marginal revenue i)Marginal product of labor j)Regulation k)Subsidy l)Taxes Law of supply Marginal revenue Increasing marginal returns (specialization) Marginal product of labor (when rising, increasing returns; when falling, decreasing returns Marginal cost (related to marginal returns) Regulation (increases costs; decreases supply)

Economics Classwork 2/6/2012 You must work on these three things in order: 1.Quiz Corrections If you scored 19 or below, you may do corrections (they will raise your grade to 80%) For any credit, you must do the following for each wrong answer (on a separate sheet of paper) –Write the wrong answer and a sentence explaining why it is the wrong answer –Write the correct answer and a sentence explaining why it is the correct answer If incomplete corrections, no credit 2.Elmo Entrepreneur Handout 3.Study for Chapter Test (Thursday) –MEL-Con project on corn subsidies begins tomorrow

Economics Bell Ringer Tuesday, 02/07/2012 Sandwich per hour Fixed Cost Variable Cost Total Cost Marginal Cost Marginal Revenue Total Revenue Profit 5$153$5 6$154 $5 7$155 $5 UPDATE YOUR TABLE OF CONTENTS #12 – 2/07/2012 – MEL-Con Packet#12 – 2/07/2012 – MEL-Con Packet How many sandwiches will you produce in one hour? Why?How many sandwiches will you produce in one hour? Why? Are there increasing or decreasing marginal returns to labor? How do you know?Are there increasing or decreasing marginal returns to labor? How do you know? The profit-maximizing output is 7 sandwiches per hour. This is because we have the highest profit of $8 and MR=MC. There are decreasing marginal returns since marginal cost is increasing for each increase in one sandwich per hour. So, the marginal product (output) is decreasing.