supplier’s motive to start a bussiness is ______
profit
_____________: The difference between the cost to produce a good or service and the amount it sold for.
Ex. It costs $8 to make a pizza (human, natural and capital resources), I sell it for $10, my profit is…
$2
profit
As price increases, supply __________
increases
as price decreases, supply _________
decreases
According to the law of supply, suppliers will offer more of a good at a ________ price
higher
___________:a chart that lists how much of a good a supplier will offer at different prices
supply schedule
________: a graph of the quantity supplied of a good at different prices
supply curve
_____: The degree to which a change in price will change supply
OR
If we change the price, will supply change a lot or a little?
elasticity of supply
__________:Items that have supplies that are increased easily are ELASTIC, the supply will go up/down a lot with a change in price
Ex. CD’s, Books, Pizza (all can increase supply with little difficulty; resources are easy to come by
elastic supply
__________:Items that have supplies that are increased with great difficulty are INELASTIC, the supply will go up/down very little with a change in price.
Ex. Cars (to increase production, need to build a new factory, hire 100s of workers, etc.)
Apples (to increase production, would have to plant more trees, taking years to grow and produce apples)
inelastic supply
change in costs of production, price of resources change, maximize profit are all _______
non price factors that affect supply
_____________: Def. If a producer can find a cheaper way to produce an item, its supply curve will change
Ex. Humans writing books- long and expensive
Computers print books faster and cheaper
Result: more books offered at a lower price
change in costs of production (non price factors that affect elasticity of supply)
_______: Human Resources: pay worker more, changes supply (produce less pizza)
Natural Resources: price of cheese increases, produce less pizzas
Capital Resources: Rent increases, produce less pizza
price of resources change (non price factors that affect elasticity of supply)
_______: Def: If a producer makes more profit selling one product instead of another, the supply for both products changes
Ex. Price of DVD’s and VCR tapes remain the same, but I can make more profit selling DVD’s
Result: Reduce the supply of VCR tapes and increase supply of DVD’s
Maximize profit (non price factors that affect elasticity of supply)
if an item is scarce than there is ________ supply
little to no supply
supply for a boycotted item ______ because nobody is buying it
increases
How does war in iraq affect supply?
increase in supply of war related materials, increased supply of news, decreased supply of gas
______: As a person increases consumption of a product - while keeping consumption of other products constant - there is a decline in the marginal utility that person derives from consuming each additional unit of that product.
diminishing marginal utility
