1. Economics
Chapter 5 Review

2. Concepts Supply Curves What are they?
They show quantity supplied at each price
Movement along the curve – Causes
Change in price
Movement of the curve – Causes
Change in the 7 things on the INDEX CARD
Slope of the curve
Positive slope because increase in price  increase in quantity supplied

3. Change in Supply – Movement of the Curve
Pg. 120

4. Concepts Supply Schedules Supply Elasticity
What are they? They show quantity supplied at each price
What information do they show?
How are they constructed?
Supply Elasticity
How do we determine elasticity?
Horizontal line: elastic
Vertical line: inelastic
More than proportional: elastic
Less than proportional: inelastic
Proportional: unit elastic

5. Supply Elasticity
Pg. 124

6. Concepts Market Supply Law of Supply e-commerce What does it show
It shows how much of a product is supplied by ALL businesses
Law of Supply
Define
e-commerce
Why would businesses engage in?
What are the benefits?
No employees, no need to pay rent, free advertisement

7. Determining Market Supply
Pg. 119

8. Concepts Theory of Production Production Schedule
Reading the schedule
Graphing the information
Profit Maximizing Point
MC = MR

9. Section 2 –Visual Summary
Pg. 139

10. Concepts 3 Stages of Production Cost Identifying: Stage I, II, III
Characteristics: Increasing, diminishing, negative
Cost
Total: the sum of your fixed cost and variable profit
Fixed: the costs that don’t change
Variable: costs that do change
Marginal: cost to make each additional product

11. Production, Costs and Revenues
Pg. 134

12. Section 1 –Visual Summary
Pg. 139

13. Section 3 –Visual Summary
Pg. 139

14. A farmer purchases a new type of seed corn
A farmer purchases a new type of seed corn. What effect might this new technology have on her production? Why?
It will shift to the right and that means that supply will increase because of an increase in production. New technology will make the curve shift to the right.

15. How do you think the inventions and changes in technology affect goods imported from other countries?
Imports are goods that come from other countries. Improvements in technology and inventions and transportation will help increase supply of imported goods to the United States.

16. Essay Questions
On supply curve, how does the quantity supplied change when the price increases? How is supply elasticity determined? Compare proportional changes to explain how you know. What does this tell you about the elasticity of the supply curve? Explain.
When the price increases, quantity supplied also changes and this is movement on the curve.
If the line is more horizontal, it is elastic. If it is more vertical, it is inelastic.
If a business quickly changes production when a change in price occurs, it is elastic.

17. Essay Questions
What causes supply of a good or service to increase as price rises? Explain your answer thoroughly.
When there is an increase in price, there is an increase in quantity supplied so there are more goods offered as prices increase.

18. Review Questions
Page 140 – 141
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