Economic 5.2 Changes in Supply 11:26-14:03

At the turn of the 20 th Century, “horseless carriages” were extremely rare (low in supply). Thanks to a change in capital (technology) the supply rose dramatically after 1913.

Agenda for Today 5.2 Slide Show Homework – Write a paragraph that reacts to the following question – Which element of Job Satisfaction do you think is most important? Explain why.

At the end of today’s lesson, your brain should be “supplied” with the ability to: How does the cost of resources affect supply How does competition affect supply What effect does worker productivity have on supply?

How does the cost of resources affect supply? Three Types of Resources – Natural Material found on earth that can be used to make a good or service – Labor Work done to make a G or S – Capital Tools, buildings, machines or money used to make a good or service Any change in cost of resource affects supply

How would a change in technology affect supply? Technology – collection of techniques, methods or processes used in the production of goods or services Technology tends to lower cost of production Example: Henry Ford’s assembly line Lowered labor cost

How does competition affect supply? Competition among businesses increases supply Example: Personal Computers – PC were initially very expensive and not very powerful – More businesses began making computers in hope of gaining profit – Supply of computers increased

Let’s Review Term for the study of how society chooses what to do with its limited resources Economics Term for basic economic problem that we want more than we can have Scarcity Term for what is given up when a different option is chosen Opportunity Cost Term for tangible things people create from natural resources Good Term for tools people use to make a good or service Capital Term for the ability and willingness of a producer to provide things for sale Supply Term for ability and willingness of a consumer to purchase a good or service Demand

What effect does worker productivity have on supply? Job Satisfaction – Degree to which a worker likes his job – Greatly affects how much work is produced (how much is supplied) – Ex. Ford paid his workers double the normal rate yet he had a high “turnover” rate Many quit because of – Lack of autonomy – Task significance – Skill variety

How do taxes and subsidies affect supply? Tax – money paid by people and business to pay for cost of government Roads, schools, military, police – Business views taxes as cost – Higher taxes = higher cost Subsidy – Money paid by government to help certain businesses produce more Price supports – Subsidy paid by government to encourage farmers to produce more

Homework Write a paragraph that reacts to the following question Which element of Job Satisfaction do you think is most important? Explain why.