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Standard Address

Standard Address. 5.2 - Objectives. 12.1 Students understand common terms & concepts and economics reasoning. Identify the determinants of supply, and explain how a change in each will affect the supply curve. Contrast a movement along the supply curve with a shift of the supply curve.

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Standard Address

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  1. Standard Address 5.2 - Objectives 12.1 Students understand common terms & concepts and economics reasoning. • Identify the determinants of supply, and explain how a change in each will affect the supply curve. • Contrast a movement along the supply curve with a shift of the supply curve.

  2. A BULLDOG ALWAYS Commitment Attitude CARES Respect Encouragement Safety

  3. Key Terms LESSON 5.2 Shifts of the Supply Curve movement along a supply curve shift of a supply curve CONTEMPORARY ECONOMICS: LESSON 5.2

  4. Determinants of Supply • Five determinants of market supply(other than the price of the good) • Cost of resources used to make the good • Price of other goods these resources could make • Technology used to make the good • Producer expectations • Number of sellers in the market CONTEMPORARY ECONOMICS: LESSON 5.2

  5. Changes in the Price of Resources • Any change in the costs of resources used to make a good will affect the supply of the good. • An increase in supply means that producers are more willing and able to supply more goods at each price. • An increase in the price of a resource will reduce supply, meaning a leftward shift of the supply curve. CONTEMPORARY ECONOMICS: LESSON 5.2

  6. Changes in the Prices of Other Goods • A change in the price of another good certain resources could make affects the opportunity cost of making a particular good. CONTEMPORARY ECONOMICS: LESSON 5.2

  7. Changes in Technology • Discoveries in chemistry, biology, electronics, and many other fields have created new products, improved existing products, and lowered the cost of production. CONTEMPORARY ECONOMICS: LESSON 5.2

  8. Changes in Producer Expectations • Any change that affects producer expectations about profitability can affect market supply. • An expectation of higher prices in the future could either increase or decrease current supply, depending on the good CONTEMPORARY ECONOMICS: LESSON 5.2

  9. Changes in the Number of Sellers in the Market • Government regulations may influence market supply. • Any government action that affects a market’s profitability, such as a change in business taxes, could shift the supply curve. CONTEMPORARY ECONOMICS: LESSON 5.2

  10. S S' $15 12 g h 9 Price per pizza 6 3 0 12 16 20 24 28 Millions of pizzas per week An Increase in the Market Supply for Pizza CONTEMPORARY ECONOMICS: LESSON 5.2

  11. S $15 S'' 12 g i 9 Price per pizza 6 3 0 12 16 20 24 28 Millions of pizzas per week An Decrease in the Market Supply for Pizza CONTEMPORARY ECONOMICS: LESSON 5.2

  12. Checkpoint: pg.143 What are the five determinants of supply, and how do changes in each effect the supply of a good? Cost of resources used to make the good – An increase in the cost of resources this will shift the supply curve inward Price of other goods these resources could make – An increase in this will shift the supply curve inward Technology used to make the good – An increase in this will shift the supply curve outward Producer expectations – An increase in this will shift the supply curve outward Number of sellers in the market – An increase in this will shift the supply curve outward CONTEMPORARY ECONOMICS: LESSON 3.3

  13. Movements Along a Supply Curve Versus Shifts of a Supply Curve • A change in price, other things constant, causes a movement along a supply curve from one price-quantity combination to another. • A change in one of the determinants of supply other than the price causes a shift of a supply curve, changing supply. CONTEMPORARY ECONOMICS: LESSON 5.2

  14. Checkpoint: pg.143 Explain the difference between a movement along a supply curve and a shift of a supply curve. A change in price, other things constant, causes a movement along a supply curve from one price-quantity combination to another. A change in one of the determinants of supply other than the price causes a shift of a supply curve, changing supply. CONTEMPORARY ECONOMICS: LESSON 3.3

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