1. Supply Warm Ups
Unit 2

2. 2/27/13:
You’re selling coffee.
You think you can sell it for $.25 a cup. How much effort will you put into your business?
What if you could sell it for $4.75 a cup? How much effort will you put into your business?

3. 2/28/13: Graph: Change in Quantity Supplied or Change in Supply
Jeans are selling for a higher price (jeans).
Wheat farmers hear that corn is selling for a higher price (corn).
Paper has become more expensive (books).

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

5. Supply of Corn S1 S2 Price Quantity Increase in Supply
---Price of Related Goods
Quantity

6. Supply of Books S2 S1 Price Quantity Decrease in Supply
---Cost of Inputs/Factors of Production
Quantity

7. 3/1/13:
Toyota realizes it could sell its Hybrid cars for a higher price (Toyota Tundra, a gas-guzzling truck).
The government has given subsidies to local wheat farmers (wheat).

8. Supply of Toyota Tundra S2
Price
Decrease in Supply
---Price of Related Goods
Quantity

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

10. 3/4/13:
A cell phone company who was still making flip phones finds out smart phones sell for a higher price (flip phones).
The price of cotton has increased (cotton T-Shirts).

11. Supply of Flip Phones S2 S1 Price Quantity Decrease in Supply
---Price of Related Goods
Quantity

12. Supply of Cotton T-Shirts S2
Price
Decrease in Supply
---Cost of Inputs/Factors of Production
Quantity

13. 3/4/13:
Summer is approaching, so soon customers will be ready to buy swimsuits (swimsuits).
Workers in a shoe factory are now working in better conditions, so they are happier and work harder (shoes).

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

15. Supply of Shoes S1 S2 Price Quantity Increase in Supply
---Technology/Productivity
Quantity

16. 3/4/13:
The price of televisions has increased (SUPPLY of televisions).
The price of televisions has increased (DEMAND for televisions).

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

18. Demand for Televisions
Decrease in QUANTITY demanded due to price change B P2
Price P1 A D1 Q2 Q1
Quantity

19. 3/4/13:
The price of televisions will decrease in two months (demand for televisions).
The unemployment rate has increased (demand for cars).

20. Demand for Televisions
Decrease in demand
*Expectations for future prices
Price D2
Quantity

21. Demand for Cars Price D1 D2 Quantity Decrease in demand
*Income – Normal Good
Price D2
Quantity