Chapter 5 – Supply
Section 1: Understanding Supply
Focus
The law of supply predicts that producers will offer more of a good as its price goes up. How strongly producers react to a change in price depends on their ability to raise or lower output.

Objective
a. Explain the law of supply.
b. Create a supply schedule and a supply curve.
c. Explain elasticity of supply and how it affects producer decisions.
d. Understand how elasticity of supply changes in the short run and in the long run.

Outline Notes:

FRAMES, Graphic Organizers and Worksheets

  • Underline all the vocabulary words in the FRAME.
  • Write a 1 SENTENCE summary for each paragraph.

PROJECT: Poetry


Vocabulary

  • Law of supply
  • Quantity supplied
  • Supply schedule
  • Variable
  • Market supply schedule
  • Supply curve
  • Market supply curve
  • Elasticity of supply

Section 1 Assessment
Key Terms and Main Ideas
1. Explain the law of supply in your own words.
2. What is the difference between supply and quantity supplied?
3. How does the quantity supplied of a good with a large elasticity of supply reacts to a price change?
Applying Economic Concepts
4. Problem Solving If the price of oil rises around the world, what will happen to the oil production in Texas? Explain your answer.
5. Decision Making Explain whether you think the supply of the following goods is elastic or inelastic, and why.
· Hotel rooms
· Taxi rides
· photographs
6. Critical Thinking When the price of a good rises, total supply in the market will rise, but some entrepreneurs might actually choose to work less. Why might they make this choice?


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