next warm up #13 sometimes the stores are all out of ____. explain how that makes you feel and why...
TRANSCRIPT
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Warm Up #13
Sometimes the stores are all out of ____.Explain how that makes you feel and
why does this happen that the store would be out of _____.
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Class Focus
We the Senior Class of 2016 will complete ALL of our assignments to best of our abilities and behave appropriately in class.
We will respect all faculty, staff, substitutes, classmates, especially Mr. Wilcox.
We will graduate on time May 20, 2016 and become productive citizens in society.
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SSEMI2
You will be able to explain how the Law of Demand, the Law of Supply, prices, and profits work to determine production and distribution in a market
economy.B. Define the Law of Supply.
Determine and define vocabulary. Identify key terms within the standard. Define each term.
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Scaffold understanding of the standard(s) and/or element(s). Paraphrase the standard(s) and/or element(s). Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1.
You will be able to explain (clarify) how the Law of Demand (want), the Law of Supply (amount), prices, and profits (income) work to determine production and distribution (delivery) in a market (shop) economy.
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The Law of Supply
Nature of SupplySSEMI2
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Nature of Supply
KEY CONCEPT• Supply is the willingness and ability of producers to offer goods
and services for sale.
WHY THE CONCEPT MATTERS• Most people are producers. Doing household chores,
working at a job, providing rides to others are ways of producing goods and services. Participating on a team is a way of supplying skills, knowledge, and support to one’s school. Producers incur (earn) costs and receive rewards for the work they do.
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The Law of SupplyKEY CONCEPTS
• Supply—willingness and ability of producers to offer goods, services
• Anyone who provides goods or services is a producer
• Law of supply:– producers willing to sell more of producer at higher than at lower
price
$ ↑, QS ↑$ ↓, QS ↓ Direct Relationship
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What is the difference between Supply and Quantity Supplied:
1. Supply—quantity of goods and services that producers are willing and able to offer at various prices during a given time period
2. Quantity Supplied—the amount of a good or service that producers are willing to supply at each particular price
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What is Supply?Ralph Lauren’s
Polo Shirts
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Law of supply:
More goods and services are supplied when they can be sold at higher prices, and fewer goods and services are supplied when they must be sold at lower prices.
Nature of SupplyNature of Supply
$ ↑, QS ↑$ ↓, QS ↓
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What causes producers to vary their supply of goods and services?
Profit Motive• The desire to make
money
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Profit
The amount of money remaining after producers have paid all of their costs
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Costs of Production
A business makes a profit when revenues are greater than costs of production.
• Wages, salaries, rent, loans, etc.
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What do supply schedules and supply curves illustrate:
Supply schedule• The quantity of a product that a producer is
willing to supply at various prices
Supply curve• graphs the data shown in supply schedules• indicates a product’s market over a specific
period of time
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Prices Relationship to Supply
Price of Socks Quantity Supplied
1
20
3
40
5
Supply Schedule
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Supply Elasticity
Indicates the extent to which price changes affect the quantity supplied.
Nature of SupplyNature of Supply
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Elastic Supply
*Small change in price causes a major change in the quantity supplied:
– i.e. Sports teams T-shirts, posters, and hats
• Products can be made:– Quickly– Inexpensively, and– Using a few, readily available resources
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Inelastic Supply
Exists when a change in a good’s price has little impact on the quantity supplied.
– If a producer cannot increase supply regardless of price. i.e. Gold, Land, Space Shuttles
• Products require a great deal of:– Time– Money– Resources that are not readily available
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Closure Activity #11
Explain the differences between the terms in each of these pairs:
• supply and law of supply• supply schedule and supply curve• market supply schedule and market supply curve
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Show What You Know!
Georgia Milestone Practice QuestionThe amount of a good or service that a producer is willingto sell at various pricesSupply scheduleLaw of supplySupplyProfit
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Show What You Know!
Georgia Milestone Practice QuestionThe relationship between the price of a good or serviceand the quantity suppliedInverseDirectProfitAll of the above
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Show What You Know!
Georgia Milestone Practice QuestionIf a producer of a good cannot produce it fast enough forconsumers to purchase regardless of the price than thatproduct is said to haveDemand elasticityDemand inelasticitySupply elasticitySupply inelasticity
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The End
Any questions?Any questions?Any Questions?Any Questions?
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Warm Up #14
What happens to the supply curve during the Labor Day holiday for sodas?
Explain what happens.
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Do the following assignment in your textbook.Chapter 5 Section 1Do Application Analyzing Effects pgs. 131, 133 & 136.Analyze Graphs pgs. , 134 & 135The NBA Goes International- Connecting Across the Globe p. 136Section 1 Assessment p. 137 2-5
Chapter 5 Section 2Analyze Tables p. 139Application Drawing Conclusions p. 139, 141, & 143Section 2 Assessment 2-5
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Class Focus
We the Senior Class of 2016 will complete ALL of our assignments to best of our abilities and behave appropriately in class.
We will respect all faculty, staff, substitutes, classmates, and especially Mr. Wilcox.
We will graduate on time May 20, 2016 and become productive citizens in society.
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SSEMI3cYou will be able to explain how the Law of Demand, the Law of Supply,
prices, and profits work to determine production and distribution in a market economy.
c. Define price elasticity of demand and supply.
Determine and define vocabulary. Identify key terms within the standard. Define each term.
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
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Scaffold understanding of the standard(s) and/or element(s). Paraphrase the standard(s) and/or element(s). Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1.
You will be able to explain (clarify) how the Law of Demand (want), the Law of Supply (amount), prices, and profits (income) work to determine production and distribution (delivery) in a market (shop) economy.
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Supply
Changes in SupplySSEM13
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When a product’s supply shifts, different quantities of products are supplied at every possible price.
Changes in SupplyChanges in Supply
KEY CONCEPT
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Acronym for
Non- Price Determinants of Supply
Come GoTo
Papa John’s Pizza
Right Now.
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Non-Price Determinants supply shifts:
CompetitionGovernment toolsTechnologyPrices of related goodsProducer expectationsResource prices
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Competition
A larger number of suppliers in a market tends to increase the supply.• A lack of competition tends to
decrease supply.
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Supply Shifts
Increase in SUPPLY shift RIGHT
Decrease in SUPPLY shift LEFT
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Government Tools
Tax—Required payment to the government
Subsidy— Payment to private businesses by the government
Regulation- Rules about how companies conduct business.
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Technology
New technology makes production more efficient and less expensive.
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Prices of Related Goods
Means that the changes in a product’s price can affect the supply for the product’s related goods.
• SUV/Gas• Cereal/ Milk
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Producer Expectations
The expectations producers have of the future of the price of their products can affect how much of their products they supply to the market now.
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Resources (prices)
The most common determinant• Includes raw materials• Electricity• Wages
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KEY CONCEPTS
• Elasticity of supply—measures producer response to price changes–Elastic—price change leads to larger
change in quantity supplied• Inelastic—price change leads to smaller
change in quantity supplied–Unit elastic—price and quantity supplied
change by same percentage
What Is Elasticity of Supply?
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Elasticity of Supply
EXAMPLE: Elastic Supply• As product gains popularity, shortage
develops, price increase• Producers can increase supply if:
–resources are easy to come by, inexpensive
–production uncomplicated, easy to increase
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Elasticity of Supply
EXAMPLE: Inelastic Supply• Producers may not increase supply if:
–availability of resources limited–production capacity cannot be increased–shipping too costly, unavailable or
difficult to get
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Conclusion: What Affects Elasticity of Supply?
KEY CONCEPTS• Main factor determining elasticity is ease of
changing production– Given enough time, elasticity rises for most goods
and services• Industries that respond quickly to rising or
falling prices:– Do not need much capital, skilled labor, hard-to-
obtain resources• Other industries need a lot of time to shift
resources
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Show What You Know!
EOCT QuestionIf an item is difficult to get, this market situation is anexample ofDemand elasticityDemand inelasticitySupply elasticitySupply inelasticity
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The End
Any questions?Any questions?Any Questions?Any Questions?
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Warm Up #15
Do Application Analyzing Effects pgs. 131, 133 & 136.
Analyze Graphs pgs. , 134 & 135
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Class Focus
We the Senior Class of 2016 will complete ALL of our assignments to best of our abilities and behave appropriately in class.
We will respect all faculty, staff, substitutes, classmates, and especially Mr. Wilcox.
We will graduate on time May 20, 2016 and become productive citizens in society.
NEXT
SSEF6You will be able to explain how the Law of Demand, the Law of Supply,
prices, and profits work to determine production and distribution in a market economy.
c. Define price elasticity of demand and supply.
Determine and define vocabulary. Identify key terms within the standard. Define each term.
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
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Scaffold understanding of the standard(s) and/or element(s). Paraphrase the standard(s) and/or element(s). Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1.
You will be able to explain (clarify) how the Law of Demand, the Law of Supply, prices, and profits (proceeds) work to determine production (manufacture) and distribution (spreading) in a market economy.c. Define price elasticity (springiness) of demand and supply.
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Supply
Making Production Decisions
SSEM12
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Why do producers look at Productivity when making supply decisions:
A. to determine how efficiently their resources are being used in production
B. to maximize efficiency
C. Increase profits
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Varying levels of input affects the levels of output:
Adding levels of input increases productivity up to a point and then eventually results in decreased productivity and in negative marginal product.
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Total Product
All of the product a company makes in a given period of time- with a given amount of input.
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Three Stages of Production (Marginal Return):
A. Increasing Marginal Returns• Each additional person increases production usually with
specialization.
B. Diminishing Marginal Returns• Each additional person added increases production but
at a slower rate
C. Negative Marginal Returns• Each additional person lowers total production
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Costs of Production:
Fixed Costs• Rent, interest on
loans, insurance, taxes, and salaries
• Overhead– Costs except
wages• Depreciation
– Decreasing value
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Costs of Production
Variable Costs• Raw materials
and wages
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Costs of Production
Total Costs• The sum of the
fixed and variable production costs
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GM AssemblyLine workers
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Marginal Costs
The additional costs of producing one more
unit of output
It is the additional costs divided by the additional product produced.
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Earning the Highest Profit
KEY CONCEPTS
• Marginal revenue—money made from sale of each additional unit sold–same as price
• Total revenue—income from selling a product–Total revenue = P (price) x Q (quantity
purchased at that price)
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Earning the Highest Profit
EXAMPLE: Production Costs and Revenues Schedule1. To make most profit, owner decides number workers
hired, units made
2. To decide, owner performs marginal analysis– comparison of costs, benefits of adding a worker,
making another unit
3. Profit-maximizing output—level of production yielding highest profit
– marginal cost and marginal revenue are equal
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How does changes in production costs affect producers’ supply decisions:
1. By determining the prices at which producers supply quantities of goods or services
2. By determining production goals
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Closure Activity #13:Robert Johnson: Supplying African-American
Entertainment
EXAMPLE: Expanding the Number of Producers• Johnson recognized cable TV industry ignored African-American
market• 1980, launched Black Entertainment Television: music, public affairs• Cable operators in U.S., Canada, Caribbean began to buy BET’s
shows• Started BET.com—number one Internet portal for African Americans• In 2001, Johnson sold BET, became first black billionaire
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The End
Any questions?Any questions?Any Questions?Any Questions?
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TEST Tomorrow!!
Productivity SupplyQuantity suppliedProfit MotiveProfit Costs of productionSupply scheduleSupply curveSupply elasticityElastic supply Inelastic supply
TaxSubsidyRegulationTotal productIncreasing marginal returnsDiminishing marginal returnsNegative marginal returnsFixed costsOverhead DepreciationMarginal costsTotal costsMarginal revenueTotal revenue**Be able to shift the supply curve left or right.