Download Government`s influence on supply

Period 5
Daily Writing Prompt
What does it mean when
supply is elastic?
Essential Question
• How much of a good or service
should a business produce?
Production Costs
• Fixed Cost – cost that does not
change, no matter how much of
a good is produced.
–Ex. Rent, salaries, machine
repairs
Production Costs
• Variable Costs – Costs that rise
or fall depending on the
quantity produced.
–Ex. Electricity, heat
• Total costs = fixed costs
Check for Understanding
• Give an example of a fixed cost
and a variable cost of a bakery.
Shifts in the Supply curve
Decrease in Supply – price remains
the same, but supply decreases
Price remains the same, but
supply decreases
•
Government’s influence on supply
• Government can encourage or
discourage production
• Subsidy – a government payment
that supports a business or market.
• Excise tax – a tax on the
production or sale of a good.
–Examples?
Government’s influence on supply
• Regulation – government
intervention in a market that
affects the price, quantity, or
quality of a good.
–Ex. Automobiles – pollution, MPG
standards
Future Expectations of Prices
• If suppliers expect prices to rise,
they will store their goods.
• If suppliers expect prices to fall,
they will place goods on the
market immediately
Do Now
• Grab a textbook
• Answer questions 1-3 & 5 on
pg. 120
• ***Those absent yesterday
can also work on
Anticipation Guide***
Period 5
Daily Writing Prompt
What is regulation?
Heads up again…
• Quiz tomorrow – Chapter 5,
Section 1
• FTF
Cablevision vs. FOX
1) What is the issue being discussed in this
article?
2) How much money is FOX asking for?
3) What different incentives are present in
this situation?
4) How could availability of substitutes
influence demand in this situation?
5) Could the government intervene to solve
this problem?
6) Who is to blame???