1. Chapter 5SectionMain Menu Opening Act Monday 10/19 Take out a sheet of paper (1/2 sheet, so share), write your name at the top and prepare to look at an Economic Cartoon and answer the questions Although this is ungraded, You must remain silent and treat this as a quiz/test as far as behavior is concerned When you are finished you need to give me your paper Economic Cartoon Keep your HW in your notes

2. Chapter 5SectionMain Menu Agenda Monday 10/19 Opening Act Discussion Chapter 5, Section 1 Notes Chapter 5, Section 1 Wrap up Assignment: Due Wednesday 10/21-no quiz –Read Chapter 5, Section 2 and in your notes answer questions 1 through 4, 6, & 7 on page 114

3. Chapter 5SectionMain Menu Understanding Supply (Chapter 5, Section 1) What is the law of supply? What are supply schedules and supply curves? What is elasticity of supply? What factors affect elasticity of supply?

4. Chapter 5SectionMain Menu Price As price increases… Supply Quantity supplied increases Price As price falls… Supply Quantity supplied falls The Law of Supply According to the law of supply, suppliers will offer more of a good at a higher price.

5. Chapter 5SectionMain Menu How Does the Law of Supply Work? Economists use the term quantity supplied to describe how much of a good is offered for sale at a specific price. The promise of increased revenues when prices are high encourages firms to produce more. Rising prices draw new firms into a market and add to the quantity supplied of a good.

6. Chapter 5SectionMain Menu $.501,000 Price per slice of pizzaSlices supplied per day Market Supply Schedule $1.001,500 $1.502,000 $2.002,500 $2.503,000 $3.003,500 Supply Schedules A market supply schedule is a chart that lists how much of a good all suppliers will offer at different prices.

7. Chapter 5SectionMain Menu Market Supply Curve Price (in dollars) Output (slices per day) 3.00 2.50 2.00 1.50 1.00.50 0 0500100015002000250030003500 Supply Supply Curves A market supply curve is a graph of the quantity supplied of a good by all suppliers at different prices.

8. Chapter 5SectionMain Menu Elasticity of supply is a measure of the way quantity supplied reacts to a change in price. Elasticity of Supply If supply is not very responsive to changes in price, it is considered inelastic. An elastic supply is very sensitive to changes in price.

9. Chapter 5SectionMain Menu Time In the long run, firms are more flexible, so supply can become more elastic. In the short run, a firm cannot easily change its output level, so supply is inelastic. What Affects Elasticity of Supply?

10. Chapter 5SectionMain Menu Want to connect to the PHSchool.com link for this section? Click Here!Click Here! Section 1 Assessment 1. What is the law of supply? (a) the lower the price, the larger the quantity supplied (b) the higher the price, the larger the quantity supplied (c) the higher the price, the smaller the quantity supplied (d) the lower the price, the more manufacturers will produce the good 2. What happens when the price of a good with an elastic supply goes down? (a) existing producers will expand and some new producers will enter the market (b) some producers will produce less and others will drop out of the market (c) existing firms will continue their usual output but will earn less (d) new firms will enter the market as older ones drop out

11. Chapter 5SectionMain Menu Want to connect to the PHSchool.com link for this section? Click Here!Click Here! Section 1 Assessment 1. What is the law of supply? (a) the lower the price, the larger the quantity supplied (b) the higher the price, the larger the quantity supplied (c) the higher the price, the smaller the quantity supplied (d) the lower the price, the more manufacturers will produce the good 2. What happens when the price of a good with an elastic supply goes down? (a) existing producers will expand and some new producers will enter the market (b) some producers will produce less and others will drop out of the market (c) existing firms will continue their usual output but will earn less (d) new firms will enter the market as older ones drop out

12. Chapter 5SectionMain Menu Want to connect to the PHSchool.com link for this section? Click Here!Click Here! Section 1 Summary 1. I am going to show you a summary, take a few minutes to read the summary, I am going to give you your ½ sheets back, on the back side of your ½ sheet, answer the questions at the end of the summary