1. Standard:
Students will examine and analyze economic concepts such as supply, so that they may understand the production, distribution, and consumption of goods and services in our capitalistic system.

3. Supply - -
The willingness and
ability of producers
to produce and sell.
Quantity Supplied - -
The number of units of a good
produced and offered for sale
at different prices.

4. . . . . . . . . Supply Schedule Price Supply $30 3,500,000
$ ,500,000
$ ,200,000
$ ,900,000
$ ,500,000
$ ,100,000
$ ,600,000
$ ,100,000
$ ,000 . . . . . . . .

5. Law of Supply - -
As the price goes up, the quantity
supplied goes up, and as the price
goes down, the quantity supplied
falls.

6. Producers (suppliers) like higher
prices because they see profit
potential.

7. Sometimes a producer must raise prices
if they want to increase output.
They need the extra money to cover costs of more employees, trucks, supplies, machines, etc.

8. **Just like demand, supply can
increase or decrease for reasons
other than price. A new curve must
be drawn.
Decrease
Increase

9. Non-price Determinants of Supply
-Price of inputs
-Technology
-Number of Firms in Industry
-Taxes
-Subsidies
-Quotas
-Weather

10. Factors Stopping Producers from
Increasing Supply
Increased costs in the factors of production
2. Time lags

11. **When the price of a product increases, more producers may enter the market. (Competition)
Some producers must wait for the price increase to
cover their start up costs.

12. Examples of production costs - -
-hire more employees
-buy more machines
-overtime pay -machine repair

13. . . . . . . . . Supply Schedule Price Supply $30 3,500,000
$ ,500,000
$ ,200,000
$ ,900,000
$ ,500,000
$ ,100,000
$ ,600,000
$ ,100,000
$ ,000 . . . . . . . .

14. **Theory of Production**
-Deals with the relationship between
the input of factors of production
and the output of goods and
services.
-Looks at the Law of Variable
Proportions as it applies to
production.

15. 3 Stages of Production
(Stages of the Law of Variable Prop)
1. Increasing Returns--
-Each new input helps total output
rise
-Each new input contributes more
than the output before. (marginal
product)

16. 2. Diminishing Returns--
-Each input helps total output
rise, but each helps less than the
one before it.
3. Negative Returns--
-Each input begins to decrease
total output.