NEXT Warm Up #13 Sometimes the stores are all out of ____. Explain how that makes you feel and why does this happen that the store would be out of _____.

NEXT Class Focus We the Senior Class of 2016 will complete ALL of our assignments to best of our abilities and behave appropriately in class. We will respect all faculty, staff, substitutes, classmates, especially Mr. Wilcox. We will graduate on time May 20, 2016 and become productive citizens in society.

NEXT SSEMI2 You will be able to explain how the Law of Demand, the Law of Supply, prices, and profits work to determine production and distribution in a market economy. B. Define the Law of Supply. Determine and define vocabulary. Identify key terms within the standard. Define each term. ________________________________________

NEXT Scaffold understanding of the standard(s) and/or element(s). Paraphrase the standard(s) and/or element(s). Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1. You will be able to explain (clarify) how the Law of Demand (want), the Law of Supply (amount), prices, and profits (income) work to determine production and distribution (delivery) in a market (shop) economy.

NEXT The Law of Supply Nature of Supply SSEMI2

NEXT Nature of Supply KEY CONCEPT Supply is the willingness and ability of producers to offer goods and services for sale. WHY THE CONCEPT MATTERS Most people are producers. Doing household chores, working at a job, providing rides to others are ways of producing goods and services. Participating on a team is a way of supplying skills, knowledge, and support to one’s school. Producers incur (earn) costs and receive rewards for the work they do.

NEXT The Law of Supply KEY CONCEPTS Supply—willingness and ability of producers to offer goods, services Anyone who provides goods or services is a producer Law of supply: –producers willing to sell more of producer at higher than at lower price $ ↑, QS ↑ $ ↓, QS ↓ Direct Relationship

NEXT What is the difference between Supply and Quantity Supplied: 1.Supply—quantity of goods and services that producers are willing and able to offer at various prices during a given time period 2.Quantity Supplied—the amount of a good or service that producers are willing to supply at each particular price

NEXT What is Supply? Ralph Lauren’s Polo Shirts

NEXT Law of supply: More goods and services are supplied when they can be sold at higher prices, and fewer goods and services are supplied when they must be sold at lower prices. Nature of Supply $ ↑, QS ↑ $ ↓, QS ↓

NEXT What causes producers to vary their supply of goods and services? Profit Motive The desire to make money

NEXT Profit The amount of money remaining after producers have paid all of their costs

NEXT Costs of Production A business makes a profit when revenues are greater than costs of production. Wages, salaries, rent, loans, etc.

NEXT What do supply schedules and supply curves illustrate: Supply schedule The quantity of a product that a producer is willing to supply at various prices Supply curve graphs the data shown in supply schedules indicates a product’s market over a specific period of time

NEXT Prices Relationship to Supply Price of SocksQuantity Supplied Supply Schedule

NEXT Supply Elasticity Indicates the extent to which price changes affect the quantity supplied. Nature of Supply

NEXT Elastic Supply *Small change in price causes a major change in the quantity supplied: –i.e. Sports teams T-shirts, posters, and hats Products can be made: –Quickly –Inexpensively, and –Using a few, readily available resources

NEXT Inelastic Supply Exists when a change in a good’s price has little impact on the quantity supplied. –If a producer cannot increase supply regardless of price. i.e. Gold, Land, Space Shuttles Products require a great deal of: –Time –Money –Resources that are not readily available

NEXT Closure Activity #11 Explain the differences between the terms in each of these pairs: supply and law of supply supply schedule and supply curve market supply schedule and market supply curve

NEXT Show What You Know! Georgia Milestone Practice Question The amount of a good or service that a producer is willing to sell at various prices Supply schedule Law of supply Supply Profit

NEXT Show What You Know! Georgia Milestone Practice Question The relationship between the price of a good or service and the quantity supplied Inverse Direct Profit All of the above

NEXT Show What You Know! Georgia Milestone Practice Question If a producer of a good cannot produce it fast enough for consumers to purchase regardless of the price than that product is said to have Demand elasticity Demand inelasticity Supply elasticity Supply inelasticity

NEXT The End Any questions? Any Questions?

NEXT Warm Up #14 What happens to the supply curve during the Labor Day holiday for sodas? Explain what happens.

NEXT Do the following assignment in your textbook. Chapter 5 Section 1 Do Application Analyzing Effects pgs. 131, 133 & 136. Analyze Graphs pgs., 134 & 135 The NBA Goes International- Connecting Across the Globe p. 136 Section 1 Assessment p Chapter 5 Section 2 Analyze Tables p. 139 Application Drawing Conclusions p. 139, 141, & 143 Section 2 Assessment 2-5

NEXT Class Focus We the Senior Class of 2016 will complete ALL of our assignments to best of our abilities and behave appropriately in class. We will respect all faculty, staff, substitutes, classmates, and especially Mr. Wilcox. We will graduate on time May 20, 2016 and become productive citizens in society.

NEXT SSEMI3c You will be able to explain how the Law of Demand, the Law of Supply, prices, and profits work to determine production and distribution in a market economy. c. Define price elasticity of demand and supply. Determine and define vocabulary. Identify key terms within the standard. Define each term. ________________________________________

NEXT Scaffold understanding of the standard(s) and/or element(s). Paraphrase the standard(s) and/or element(s). Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1. You will be able to explain (clarify) how the Law of Demand (want), the Law of Supply (amount), prices, and profits (income) work to determine production and distribution (delivery) in a market (shop) economy.

NEXT Supply Changes in Supply SSEM13

NEXT When a product’s supply shifts, different quantities of products are supplied at every possible price. Changes in Supply KEY CONCEPT

NEXT Acronym for Non- Price Determinants of Supply Come Go To Papa John’s Pizza Right Now.

NEXT Non-Price Determinants supply shifts: Competition Government tools Technology Prices of related goods Producer expectations Resource prices

NEXT Competition A larger number of suppliers in a market tends to increase the supply. A lack of competition tends to decrease supply.

NEXT Supply Shifts Increase in SUPPLY shift RIGHT Decrease in SUPPLY shift LEFT

NEXT Government Tools Tax—Required payment to the government Subsidy— Payment to private businesses by the government Regulation- Rules about how companies conduct business.

NEXT Technology New technology makes production more efficient and less expensive.

NEXT Prices of Related Goods Means that the changes in a product’s price can affect the supply for the product’s related goods. SUV/Gas Cereal/ Milk

NEXT Producer Expectations The expectations producers have of the future of the price of their products can affect how much of their products they supply to the market now.

NEXT Resources (prices) The most common determinant Includes raw materials Electricity Wages

NEXT KEY CONCEPTS Elasticity of supply—measures producer response to price changes –Elastic—price change leads to larger change in quantity supplied Inelastic—price change leads to smaller change in quantity supplied –Unit elastic—price and quantity supplied change by same percentage What Is Elasticity of Supply?

NEXT Elasticity of Supply EXAMPLE: Elastic Supply As product gains popularity, shortage develops, price increase Producers can increase supply if: –resources are easy to come by, inexpensive –production uncomplicated, easy to increase

NEXT Elasticity of Supply EXAMPLE: Inelastic Supply Producers may not increase supply if: –availability of resources limited –production capacity cannot be increased –shipping too costly, unavailable or difficult to get

NEXT Conclusion: What Affects Elasticity of Supply? KEY CONCEPTS Main factor determining elasticity is ease of changing production –Given enough time, elasticity rises for most goods and services Industries that respond quickly to rising or falling prices: –Do not need much capital, skilled labor, hard-to- obtain resources Other industries need a lot of time to shift resources

NEXT Show What You Know! EOCT Question If an item is difficult to get, this market situation is an example of Demand elasticity Demand inelasticity Supply elasticity Supply inelasticity

NEXT The End Any questions? Any Questions?

NEXT Warm Up #15 Do Application Analyzing Effects pgs. 131, 133 & 136. Analyze Graphs pgs., 134 & 135

NEXT Class Focus We the Senior Class of 2016 will complete ALL of our assignments to best of our abilities and behave appropriately in class. We will respect all faculty, staff, substitutes, classmates, and especially Mr. Wilcox. We will graduate on time May 20, 2016 and become productive citizens in society.

NEXT SSEF6 You will be able to explain how the Law of Demand, the Law of Supply, prices, and profits work to determine production and distribution in a market economy. c. Define price elasticity of demand and supply. Determine and define vocabulary. Identify key terms within the standard. Define each term. ________________________________________

NEXT Scaffold understanding of the standard(s) and/or element(s). Paraphrase the standard(s) and/or element(s). Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1. You will be able to explain (clarify) how the Law of Demand, the Law of Supply, prices, and profits (proceeds) work to determine production (manufacture) and distribution (spreading) in a market economy. c. Define price elasticity (springiness) of demand and supply.

NEXT Supply Making Production Decisions SSEM12

NEXT Why do producers look at Productivity when making supply decisions: A.to determine how efficiently their resources are being used in production B.to maximize efficiency C.Increase profits

NEXT Varying levels of input affects the levels of output: Adding levels of input increases productivity up to a point and then eventually results in decreased productivity and in negative marginal product.

NEXT Total Product All of the product a company makes in a given period of time- with a given amount of input.

NEXT Three Stages of Production (Marginal Return): A. Increasing Marginal Returns Each additional person increases production usually with specialization. B. Diminishing Marginal Returns Each additional person added increases production but at a slower rate C. Negative Marginal Returns Each additional person lowers total production

NEXT Costs of Production: Fixed Costs Rent, interest on loans, insurance, taxes, and salaries Overhead –Costs except wages Depreciation –Decreasing value

NEXT Costs of Production Variable Costs Raw materials and wages

NEXT Costs of Production Total Costs The sum of the fixed and variable production costs

NEXT GM Assembly Line workers

NEXT Marginal Costs The additional costs of producing one more unit of output It is the additional costs divided by the additional product produced.

NEXT Earning the Highest Profit KEY CONCEPTS Marginal revenue—money made from sale of each additional unit sold –same as price Total revenue—income from selling a product –Total revenue = P (price) x Q (quantity purchased at that price)

NEXT Earning the Highest Profit EXAMPLE: Production Costs and Revenues Schedule 1.To make most profit, owner decides number workers hired, units made 2.To decide, owner performs marginal analysis –comparison of costs, benefits of adding a worker, making another unit 3.Profit-maximizing output—level of production yielding highest profit –marginal cost and marginal revenue are equal

NEXT How does changes in production costs affect producers’ supply decisions: 1.By determining the prices at which producers supply quantities of goods or services 2.By determining production goals

NEXT Closure Activity #13: Robert Johnson: Supplying African-American Entertainment EXAMPLE: Expanding the Number of Producers Johnson recognized cable TV industry ignored African-American market 1980, launched Black Entertainment Television: music, public affairs Cable operators in U.S., Canada, Caribbean began to buy BET’s shows Started BET.com—number one Internet portal for African Americans In 2001, Johnson sold BET, became first black billionaire

NEXT The End Any questions? Any Questions?

NEXT 65 TEST Tomorrow!! Productivity Supply Quantity supplied Profit Motive Profit Costs of production Supply schedule Supply curve Supply elasticity Elastic supply Inelastic supply Tax Subsidy Regulation Total product Increasing marginal returns Diminishing marginal returns Negative marginal returns Fixed costs Overhead Depreciation Marginal costs Total costs Marginal revenue Total revenue **Be able to shift the supply curve left or right.