Bell Work

1. Bell Work Define the following terms in your own words • Law of Demand • Diminishing Marginal Utility • Change in quantity demanded • Change in demand • Elastic Demand • Inelastic Demand

2. In Lak’ech by Luis Valdez • Tueres me otroyo • Si tehagodaño a ti, • Me hagodaño a mi mismo • Si teamo y respeto • Me amo y respetoyo • You are my other me • If I do harm to you, • I do harm to myself • If I love and respect you • I love and respect myself

3. Bell Work Define the following terms in your own words • Law of Demand • Diminishing Marginal Utility • Change in quantity demanded • Change in demand • Elastic Demand • Inelastic Demand

4. Chapter 4 Quiz Demand

5. Reflection How do you think demand helps societies determine the WHAT, HOW and FOR WHOM to produce?

6. Bell Work If demand is the quantity of a product that consumers are willing and able to purchase at various prices, what do you think supply is?

7. In Lak’ech by Luis Valdez • Tueres me otroyo • Si tehagodaño a ti, • Me hagodaño a mi mismo • Si teamo y respeto • Me amo y respetoyo • You are my other me • If I do harm to you, • I do harm to myself • If I love and respect you • I love and respect myself

8. Bell Work If demand is the quantity of a product that consumers are willing and able to purchase at various prices, what do you think supply is?

9. Chapter 5: Supply What are the basic differences between supply and demand? Why is the production function useful for making business decisions? How do companies determine the most profitable way to operate?

10. Today’s Objectives: • Describe the basic differences between supply and demand • Explain why supply and demand curves slope in opposite directions • Compare a change in quantity supplied to a change in supply • List the 8 factors that can cause a change in supply • Summarize the 3 cases of supply elasticity

11. An Introduction to Supply • Supply is the amount of a product offered for sale at all possible prices in a market. • The Law of Supply states that more product will be offered for sale at higher prices than at lower prices. • Normal supply curves have a positive slope that goes up from left to right; if price goes up, quantity supplied goes up as well. • Change in quantity supplied refers to a change in the quantity of a product offered for sale in direct response to a change in price.

18. Change in Supply • Achange in quantity supplied occurs only when prices change • A change in supply occurs when quantities change even though price remains constant.

19. Factors that can cause a change in supply: • Cost of resources • Productivity • Technology • Taxes • Subsidies • Government regulations • Number of sellers • Expectations

21. Supply • https://www.youtube.com/watch?v=ewPNugIqCUM

22. Elasticity of Supply • Supply elasticity is a measure of the degree to which the quantity supplied responds to a change in price. • Like demand, supply can be elastic, inelastic, or unit elastic. • Production considerations alone determine supply elasticity. If a firm can adjust to new prices quickly, then supply is likely to be elastic. If adjustments take much longer, then supply is likely to be inelastic.

27. Reflection Choose one of the following: • Describe the basic differences between supply and demand • Explain why supply and demand curves slope in opposite directions • Compare a change in quantity supplied to a change in supply • List the 8 factors that can cause a change in supply • Summarize the 3 cases of supply elasticity

28. Quiz Results • Overall Average: 79.7% • This Class: %

29. Consider the term marginal utility. Which word is the best synonym for marginal? • Useful • borderline • satisfactory • additional

30. Which term refers to a change in price that causes a proportional change in total revenue? • elastic • inelastic • unit elastic • total expenditures

31. Bell Work What is a factor that can cause a shift in supply?

32. In Lak’ech by Luis Valdez • Tueres me otroyo • Si tehagodaño a ti, • Me hagodaño a mi mismo • Si teamo y respeto • Me amo y respetoyo • You are my other me • If I do harm to you, • I do harm to myself • If I love and respect you • I love and respect myself

33. Bell Work What is a factor that can cause a shift in supply?

34. Today’s Objectives: • Explain how production affects supply elasticity • Explain how the production function is used to make business decisions • Discuss the total and marginal product of different production periods • Summarize the three stages of production

35. ACME Paper Chain Company

36. The Production Function • The production function is a graph or figure that shows how a change in one production variable affects total output. • Production can be analyzed in terms of short-run or long-run relationships between inputs and outputs. • Marginal product is the extra output or change in total product caused by adding one more unit of input.

38. Diminishing Marginal Returns • https://www.youtube.com/watch?v=xLSRMt-wWAM

39. Stages of Production • Marginal product changes as more workers are added. • In Stage I of the production function, the marginal product increases with each additional worker. • Stage II of the production function operates on the principle of diminishing returns; marginal products are still positive, but decrease steadily. • In Stage III of the production function, the company has hired too many workers, and they interfere with one another and with production, causing marginal product to become negative.

40. Marginal Analysis • https://www.youtube.com/watch?v=0BAMv6lV2t4&list=PLDVijUoYHx6LKKWO09Kt5U8qcoIDKpoQF&index=2

41. Reflection Choose one of the following: • Explain how production affects supply elasticity • Explain how the production function is used to make business decisions • Discuss the total and marginal product of different production periods • Summarize the three stages of production

42. Bell Work What has most likely happened if the quantity supplied of a product falls?

43. In Lak’ech by Luis Valdez • Tueres me otroyo • Si tehagodaño a ti, • Me hagodaño a mi mismo • Si teamo y respeto • Me amo y respetoyo • You are my other me • If I do harm to you, • I do harm to myself • If I love and respect you • I love and respect myself

44. Bell Work What has most likely happened if the quantity supplied of a product falls?

45. Today’s Objectives: • Differentiate among fixed, variable, total, and marginal costs • Explain the differences in average, total and marginal revenue • Identify the relationship between profit maximization and break-even analysis

46. Finding Marginal Cost • The costs that an organization incurs even when there is little or no activity are fixed costs, or overhead. • Variable costs are usually associated with labor and raw materials and change with the business’s rate of operation or output. • Total cost is the sum of fixed and variable costs. (TC=FC+VC) • Marginal cost is the extra cost incurred to produce one more unit of output. (∆VC/MP)

47. Finding Marginal Revenue • Total revenue is all of the revenue a business receives. (TR=TPxP) • Marginal revenue is the extra revenue a business receives from the production and sale of one additional unit of output. (MR=TR/TP) • Marginal revenue is the most important measure of revenue.

48. Profit Maximization and Break-Even • Profitability is affected by both costs and revenue • The break even point is the level of production that generates just enough revenue to cover total operating costs. • The profit maximization quantity of output is the volume of production where marginal costs and marginal revenue are equal

50. Profit Maximization and Break-Even • Profitability is affected by both costs and revenue • The break even point is the level of production that generates just enough revenue to cover total operating costs. • The profit maximization quantity of output is the volume of production where marginal costs and marginal revenue are equal • E-commerce has much lower overhead and does not require as much inventory as traditional retail stores, so the break even point of sales is much lower