1. Basic Economic Concepts
Supply and Demand
Purpose: Identify changes in events that will result in a change in supply.

2. I. Goals Correctly label and graph a supply curve and shift.
Identify an increase and decrease in supply.
Identify the determinants of supply and their effect on the shifting of the supply curve.

3. II. Determinants of Supply
Factors that will change supply regardless of price.
Changes in Resource Prices
Number of Sellers in the Market
Government Intervention
Prices of Other Goods
Price Expectations

4. II. Determinants of Supply
Changes of Resource Prices: change in the price of materials used to make a product will cut into profits and force producers to change supply.

5. II. Determinants of Supply
Number of Sellers in the Market: the more producers in the market the larger the quantity supplied.

6. II. Determinants of Supply
Government Intervention: by raising and lowering the cost of producing goods the government can encourage or discourage sellers.
Government payment to support a business or market
Ex. Subsidies on corn
Subsidies
Taxes placed on the sale or production of a good
Ex. Taxes on cigarettes
Excise Taxes

7. II. Determinants of Supply
Price of Other Goods: when there is an increase in price for one of two products that require similar resources, sellers will switch production to more of the cheaper good.
Higher profits

8. II. Determinants of Supply
Producer Expectations: their expectations of the future can impact their willingness to supply a product.