Download Section 1 “Understanding Supply” pgs. 101-107

ECONOMICS
GUIDED READING
CHAPTER 5: “SUPPLY”
Section 1 “Understanding Supply” pgs. 101-107
1.
What does the “ LAW OF SUPPLY ” state?
2.
What is Supply?
3.
Describe Quantity Supplied.
4.
5.
These two movements
A.
B.
combine to create the
A Supply Schedule shows
6.
This
compares two
or factors that can change.
A change in quantity supplied will
7.
8.
9.
10.
11.
12.
13.
14.
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A market supply schedule shows the
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What is a Supply Curve & how is it different from a schedule?
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Explain Elasticity of Supply
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If supply is not very responsive to changes in price and elasticity is less than
one, then it is considered
______.
What is Unit Elasticity?
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What is the key factor that will determine if supply is elastic or inelastic?
____
Supply is considered
in the short run because
suppliers cannot produce substantially more in a short time even if prices
go up.
Supply can become more elastic in the
____
because they have more time to prepare to increase supply.
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15.
Which direction does the supply curve slope?
____
Draw examples of an elastic and an inelastic Supply Curve, make sure you
label each one:
(A) Elastic Supply Curve
(B) Inelastic Supply Curve
SECTION 2-“Costs of Production” pg 108-114
1. The change in output from hiring one additional unit of labor (worker) is called
____
2. A level of production in which the marginal product of labor decreases as the
number of workers increases is called
____
3. Describe diminishing marginal returns
____
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____
4.
is the cost of paying workers & purchasing
capital and it is considered the cost of producing goods.
5.
are costs that do not change with the level
of Production no matter how much a producer produces. Examples:
____
____
6.
change as the level of production
changes. Examples could be :
____
7. Which factors of production are associated with variable costs:
A.
____
B.
____
8.
are fixed cost plus variable costs.
9.
is the cost of producing one more unit
of a good.
11. The best level of output is when
is equal to
. Any other level of output would
generate less profit.
12.
is the cost of operating a facility such
as a store or factory.
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13 (A) Draw/label a curve showing a
showing a change in Quantity Supplied
(A)
___
(B) Draw/label a curve
change in Supply
(B)
________
Section 3 “Changes in Supply” Pgs. 116-121
1. List the four factors that will bring about a Change in Supply:
A.
____
B.
____
C.
____
D.
____
2. As the level of cost for inputs rises the supply curve will shift to the
____
due to decreasing profits. On the other hand, if the price of outputs decrease,
the supply curve will shift to the
because profits will increase.
3. Input costs can drop as advancements in
are made.
Technology lowers costs and increases supply at all price levels.
4. List three ways that government can affect supply.
A.
____
B.
____
C.
____
5. One method used by government to affect supply is to give
____.
A
is a government payment that supports a business or
market.
6. A reason that government might subsidize an industry is to protect
____
industries from foreign competition.
7. What type of tax might the government use to reduce the supply of certain
goods?
Give two examples of this type of tax:
A.
____
B.
____
8. An indirect means by government to affect supply would be through government
. Give an example:
____
____
9. As you have read a large & rising share of goods & services is produced in one
Country and imported to be sold to consumers. Give an example of a product
that will cause a change in supply to the US markets.
____
____
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____
10. List another factor that can influence our supply. Example: future
expectations of price.
____
____
____
11. One final factor to consider when looking at changes in supply is the
____
of suppliers. If more producers enter the market the
supply of goods will
. If producers leave, the market
supplies will
_____________________________________.
12. Draw/label a curve showing an (A) Increase in supply (B) Decrease in Supply
(A)
(B)
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