2. SUPPLY – A PRODUCT OFFERED FOR SALE AT ALL POSSIBLE PRICES THAT COULD PREVAIL IN THE MARKET

3. LAW OF SUPPLY – THE PRINCIPLE THAT SUPPLIERS WILL OFFER MORE FOR SALE AT HIGH PRICES & LESS AT LOW PRICES

4. SUPPLY SCHEDULE A LIST OF VARIOUS QUANTITIES OF A PRODUCT SUPPLIED AT ALL POSSIBLE PRICES

5. SUPPLY CURVE

6. P S Q

7. SUPPLY SCHEDULE- CAPS PRICE QUANTITY SUPPLIED $25/EACH 8 20 6 15 4 10 2 5 0 THE PRICE & QUANTITY NOW MOVE IN THE SAME DIRECTION

8. INDIVIDUAL SUPPLY CURVE CAPS { DECREASE IN QUANTITY SUPPLIED} $25 D 20 C 15 B { INCREASE IN QUANTITY SUPPLIED} 10 A 5 2 4 6 8

9. SUPPLY SCHEDULE- CAPS QUANTITY SUPPLIED PRICE FIRM A FIRM B = MARKET $25/EACH 8 4 = 12 20 6 3 = 9 15 4 2 = 6 10 2 1 = 3 5 0 0 = 0 PFIRM ? CURVE P FIRM ? CURVE P ? CURVE 25 25 25 20 20 20 15 15 15 10 10 10 5 5 5 0 2 4 6 8 0 1 2 3 4 0 3 6 9 11

10. QUANTITY SUPPLIED THE AMOUNT THAT PRODUCERS BRING TO MARKET AT ANY GIVEN PRICE CHANGE IN QUANTITY SUPPLIED THE CHANGE IN AMOUNT OFFERED FOR SALE IN RESPONSE TO A PRICE CHANGE

11. INCREASE IN QUANTITY SUPPLIED P S Q

12. INCREASE IN SUPPLY P S1 S2 Q

13. EXAMPLE TAKE OIL---IF THE PRICE FALLS, THE PRODUCER MAY OFFER LESS UNITS TO SELL--- IF IT RISES, HE’LL MOST LIKELY OFFER MORE UNITS TO SELL

14. CHANGE IN SUPPLY --SHIFT CAPS P $25 S S2 THIS RERESENTS 20 A SHIFT IN SUPPLY 15 (INCREASE) 10 5 0 2 4 6 8 10 Q

16. CHANGES IN SUPPLY OCCUR FOR SEVERAL REASONS(SHIFTERS) ACRONYM “ROTTENS”

17. RESOURCE AVAILABILTY (INGREDIANTS) IF THE AVAILABILITY OF RESOURCES DECREASE, WHAT WILL THE SUPPLY CURVE DO? NAME SOME RESOURCES FOR MAKING BOOKS.

18. RESOURCE AVAILABILTY (INGREDIANTS) NAME SOME RESOURCES FOR MAKING BOOKS.

19. OTHER GOODS & SERVICES(INPUTS) IF INPUTS DECREASE, PRODUCERS MAY PRODUCE MORE OF A PRODUCT AT EACH AND EVERY PRICE. WHAT WOULD THE SUPPLY CURVE DO? IN

20. OTHER GOODS & SERVICES(INPUTS) NAME SOME INPUTS

21. EXAMPLES OR INPUTS GOVERNMENT REGULATIONS UTILITIES COSTS WORKER PRODUCTIVITY EQUIPMENT COSTS

22. TECHNOLOGY NEW TECHNOLOGY TENDS TO LOWER THE COST OF PRODUCTION & INCREASE PRODUCTIVITY. WHAT WOULD THE SUPPLY CURVE DO?

23. TECHNOLOGY NAME AN INSTANCE WHEN TECHNOLOGY WOULD SHIFT THE CURVE THE OTHER WAY.

24. TECHNOLOGY BREAKDOWNS

25. TAXES IF TAXES GO UP, THE COST OF PRODUCTION GOES UP. WHAT WOULD AN INCREASE IN TAXES DO TO THE SUPPLY CURVE?

26. EXPECTATIONS #1 THIS IS A GUESS OF THE FUTURE PRICE OF A PRODUCT. IF PRODUCERS THINK THE PRICE WILL GO UP, THEY MAY WITHHOLD SOME SUPPLY, CAUSING A ____ IN SUPPLY TO THE MARKET. DE

27. EXPECTATIONS #1 WHICH WAY WILL THE SUPPLY CURVE SHIFT?

29. EXPECTATIONS #2 IF PRODUCERS THINK THE PRICE WILL GO DOWN, THEY MAY _____ SUPPLY TO THE MARKET. IN

30. EXPECTATIONS #2 IN WHICH WAY WILL THE SUPPLY CURVE SHIFT?

32. NUMBER OF SELLERS AFFECTS BOTH THE INDIVIDUAL COMPANY AND THE MARKET SUPPLY CURVE.

33. NUMBER OF SELLERS. WHAT HAPPENS TO THE SUPPLY in CURVE WHEN MORE FIRMS ENTER THE MARKET?

34. SUBSIDIES WHAT ARE THEY? GOVT. PAYMENTS TO ENCOURAGE AN ECONOMIC ACTIVITY

35. SUBSIDIES GIVE AN EXAMPLE OF A SUBSIDY AND WHAT IT WOULD DO TO THE SUPPLY CURVE.

36. SUBSIDIES GIVE AN EXAMPLE OF A SUBSIDY AND WHAT IT WOULD DO TO THE SUPPLY CURVE. MILK PRODUCERS PAID NOT TO PRODUCE MILK.

37. MILK SUBSIDY

38. GOVERNMENT REGULATIONS INCREASED GOVERNMENT REGULATIONS (IE: NEW SAFETY FEATURES) CAN INCREASE THE COST OF PRODUCTION. WHAT DOES THIS DO TO SUPPLY?

39. GOVERNMENT REGULATIONS

41. CHANGES IN ELASTICITY ARE CAUSED BY

42. ACRONYM SUBSTITUTE URGENCY NECESSITY LUXURY Y-INCOME DEMINISHING MARGINAL RETURN

43. WHAT ARE SOME EXAMPLES OF ELASTIC SUPPLY:

44. WHAT ARE SOME EXAMPLES OF INELASTIC SUPPLY:

45. P S INELASTIC – STEEP – NECCESITIES (WATER) A CHANGE IN PRICE RESULTS IN A SMALL CHANGE IN SUPPLY P ELASTIC – FLAT – LUXURIES (EXPENSIVE CARS) A CHANGE IN PRICE RESULTS IN A LARGE CHANGE IN SUPPLY S Q

50. CHAPTER 6 PRICES & DECISIONS

51. PRICE- A LINK BETWEEN PRODUCERS & CONSUMERS

52. RATIONING – A SYSTEM WHERE AGENCIES DECIDE WHAT IS FAIR FOR EVERYONE.

53. MARKET EQUALIBRIUM – WHEN GOODS & SERVICES SUPPLIED IS EQUAL TO QUANTITY DEMANDED.

54. SURPLUS – OUANTITY SUPPLIED IS GREATER THAN OUANTITY DEMANDED

55. SHORTAGE – QUANTITY DEMANDE IS GREATER THAN QUANTITY SUPPLIED

56. PRICE EQUALIBRIUM – IT “CLEARS THE MARKET” : THERE IS NO SURPLUS OR SHORTAGE AT THE END OF THE SELLING PERIOD

57. CHANGE IN PRICE – A CHANGE IN PRICE OR DEMAND OR BOTH

58. INCREASE IN DEMAND P D D2 S P ? Q ? Q

59. INCREASE IN DEMAND P D D2 S P Q

60. DECREASE IN DEMAND P D2 D S P ? Q ? Q

61. DECREASE IN DEMAND P D2 D S P Q

62. INCREASE IN SUPPLY P D S S2 P ? Q ? Q

63. INCREASE IN SUPPLY P D S S2 P Q

64. DECREASE IN SUPPLY P D S2 S P ? Q ? Q

65. DECREASE IN SUPPLY P D S2 S P Q