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5.1 - Understanding Supply October 6 & 7, 2010 Please Do Now: Imagine you own a factory that produces sunglasses and that the price of sunglasses begins to rise rapidly. Do you think that you would produce more pair of sunglasses, fewer pairs, or the same number as before. Objectives • Explain the law of supply • Interpret a supply graph using a supply schedule The Law of Supply • Supply is the amount of goods available. • Law of supply states the higher the price, the larger the quantity produced. • Quantity supplied describes how much of a good is offered for sale at a specific price. Law of Supply The Supply Schedule & Curve • A supply schedule and curve shows the relationship between price and quantity supplied for a specific good. • Market supply schedule and curve shows the relationship between prices and the total quantity supplied by all firms in a particular market. Supply and Elasticity • Elasticity of supply is a measure of the way quantity supplied reacts to a change in price. • Values of elasticity (elastic, inelastic, and unitary) carry the same values as those in demand. Elastic Supply When supply is elastic, a small increase in price Price has a big effect on supply. Supply Check your understanding... • The tendency of suppliers to offer more of a good at a higher price is know as ... • A) Law of Supply • B) Supply • C) Quantity Supplied Class Activity Vocabulary Challenge Choose as many activities as possible to earn a total of 100 points. Write a sentence for 5 of the key Create a comic strip for 5 of the terms. key terms. (25 points) (25 points) Write a letter to the President of Create a crossword puzzle using the United States explaining the all key terms - 9 words concept of supply. You must use (75 points) all 9 words. (75 points) Class Activity • YOU ARE NOW AN ICE CREAM PALOR OWNER! • Working with a partner, create a supply schedule for ice cream cones (similar to page 103). Then, turn the supply schedule into a supply curve (similar to page 105). Home Learning • Read pages 100 - 106. • Answer questions 2-6 even - write questions & answers. • Due: Friday (A) or Monday (B)
"5.1 - Understanding Supply October 6 _amp; 7_ 2010 Please Do Now "