Name Date period Economics UNIT SUPPLY

Transcription

1 Name Date period Economics UNIT SUPPLY The purpose of the guided reading and note-taking packets is to help guide you through the textbook, and help you prepare for inclass discussions and activities. You can choose to use all or part of each packet and/or another method that serves your learning. Only the enduring understanding response(s) portion of the packet will be formally assessed. Additionally, you are expected to master the content outlined in the packets, and that content mastery will be formally assessed. Enduring Understandings 1. Take any product and graph a supply curve for the product and explain and graph changes in quantity supplied. Graph and explain changes in supply with specific reference to supply shifters (determinants). 1

2 SUPPLY In-class: supply, supply curve, Law of Supply and the change in quantity supplied (Chpt 5.4 pgs ) CHANGE IN SUPPLY AND SUPPLY SHIFTERS Read Section 5.5. Answer the questions and complete a row in the matrix for each of the six supply shifters (determinants) described in Section 5.5. Change in cost of inputs has been completed for you. 1. What is a change in supply? 2. What is a supply shifter? 3. Why is a change in supply not the same as a change in quantity supplied? Supply Shifter How the supply shifter influences the supply curve Sketch what happens to the supply curve if the shifter increases the cost of inputs (factors of production) As the cost of production increases because the cost of inputs/factors of production has gone up, then it becomes more expensive to produce that good or service, so supply will decrease. This will shift the supply curve to the left. Change in the number of producers in the marketplace 2

3 Supply Shifter How the supply shifter influences the supply curve Sketch what happens to the supply curve if the shifter increases conditions due to natural disasters or international events technology producer expectations Graph supply now if producers expect the price to rise in the future. government policy Subsidies: Graph an increase in either taxes or regulations. Taxes: Regulations: 4. What is the relationship between supply shifters and changes in supply? 5. If only the price for a good or service changes, does the supply curve shift? Why or why not? 6. Which of the supply shifters will usually cause supply to shift in only one direction? Why? 3

4 Directions: Read each headline below and determine the effect this headline would have on the supply for overall market place OR for the good or service indicated. Draw a supply curve that reflects that change and list which supply shifter (if any) is at play. 1. War in the Middle East Causes Oil Prices to Skyrocket What effect does this have on the supply of gasoline? 5. Storm Hits Alaska Extensive Damage to Fishing Vessels What effect does this have on the supply of fish? 2. Engineer Invents Faster Way to Make Computer Chips What effect does this have on the supply of computer chips? 6. House Prices More Expensive for Second Year in a Row What effect does this have on the supply of houses? 3. New Book Store Opens in Shopping Mall What effect does this have on the supply of books? 7. Price of Cotton Falls What effect does this have on the supply of t-shirts? 4. Damage to Panama Canal Will Slow Coffee Imports Next Month What effect does this have on the supply of coffee now? 8. Government Announces Tax Breaks on Production of Fuel Efficient Cars What effect does this have on the supply of fuel efficient cars? 4

5 REASONS FOR CHANGES IN SUPPLY Objective: Directions: To understand what drives changes in supply and how that is different from changes in quantity supplied. Using the graph below, begin at curve C. Read each newspaper headline and decide if the event will cause a change in supply of cars. Fill in the blank with increase decrease or no change then indicate which curve you will move to from the curve you are currently on. Move only one curve at a time. Indicate which supply shifter is at work when appropriate. Price (P) A B C D E Supply of cars produced in the US (Q) 1. Auto Workers Union Agrees to Wage and Benefits Cuts Supply Curve Determinant/Shifter 2. New Robot Technology Increases Efficiency Supply Curve Determinant/Shifter 3. Nationwide Auto Worker s Strike Began at Midnight Supply Curve Determinant/Shifter 4. National Government Significantly Reduces Subsidies on Fuel Efficient Cars Supply Curve Determinant/Shifter 5. Cost of Steel Rises Supply Curve Determinant/Shifter 6. Car Producer Goes Bankrupt, Closes Operation Supply Curve Determinant/Shifter 7. Buyers Reject New Models Supply Curve Determinant/Shifter 5