Section+5.1

Supply: the amount of goods available Law of Supply: tendency of suppliers to offer more of a good at a higher price Quantity Supplied: the amount a supplier is willing and able to supply a certain price Law of supply develops from choices of both current and new producers of a good. A price of goods rises people will produce more and new businesses will open to sell the same goods. If price drops less will be produced and some businesses will drop out of market. Supply Schedule: a chart that lists how much of a good supplier will offer at different prices (similar to Demand Schedule) Variables: a factor that can change Like demand schedule, a supply schedule lists supply for a very specific set of conditions. Economists use supply to describe relationship between price and quantity. Market Supply Schedule: a chart that lists how much of a good all suppliers will offer at different prices Market Supply Schedule shows relationship between prices and the total quantity supplied by all firms in a particular market Supply Curve: a graph of the quantity supplied of a good at different prices. Market Supply Curve: graph of the quantity supplied of a good by all suppliers at different prices Key Feature of the supply curve is that it always rises from left to right. Elasticity of Supply: a measure of the way quantity supplied reacts to a change in price.

1.)Explain the law of supply in your own words the higher the price, the larger the quantity 2.)What is the difference between supply and quantity supplied Supply is the amount of goods available and quantity supplied is the amount a supplier is willing and able to supply 3.)How does the quantity supplied of a good with a large elasticity of supply react to a price change. If it has a large elasticity than it is sensitive to change 4.)If the price of oil rises around the world, what will happen to oil production in Texas. If the Price of oil rises than oil production in Texas will rise according the Law of Supply 5.)Explain whether you think the supply of the following goods is elastic or inelastic a.)Hotel Rooms: Elastic b.)Taxi Rides: Elastic c.)Photographs: Inelastic 6.)When the price of a good rises, total supply in the market will rise, but some entrepreneurs might actually choose to workless. Why might they make this choice? They would not have to pay people more for the extra work and they would still make more money