Ch.5+notes&hw

5.1 Notes
 * Supply is the amount of goods available.
 * Law of supply is the tendency suppliers to offer more of a good at a higher price.
 * Quantity supplied is the amount a supplier is willing and able to supply at a certain price.
 * A supply schedule is a chart that lists how much of a good a supplier will offer at different prices.
 * Variable is a factor that can change.
 * Market supply schedule is a chart that lists how much of a good all suppliers will offer at different prices.
 * A supply curve is a graph of quantity supplied of a good at different prices.
 * Market supply curve is a graph of the quantity supplied of a good by all suppliers at different prices.
 * Elasticity of supply is a measure of the way quantity supplied reacts to a change in price.
 * The law of supply, which says that a higher price leads to higher output.
 * The labels elastic, inelastic, and unitary elastic represent the same values of elasticity of supply as those of elasticity of demand.
 * While the supply of oranges is inelastic, the supply of goods made from oranges is elastic.

Questions #1-5 1. Law of supply to me seems, like it makes the owners realize they have to have more of a certain good because the price is so high.

2. Supply is the amount of goods available, and quantity supplied is the amount a supplier is willing and able to supply at a certain price.

3. Elasticity of supply is a measure of the way quantity supplied reacts to a change in price.

4. The oil production would make Texas raise its oil production prices raise a lot because people will still have to buy oil.

5. Hotel rooms are inelastic, because there are so many other competitors and people are willing to go somewhere cheap in style in order to get a cheaper price. Taxi rides are also inelastic because people can find other ways of transportation. Photographs are inelastic because of all the camera buying opportunities.

5.2

Questions #1-4 1. The marginal product of labor can change as more workers are hired by, changing the output from hiring one additional unit of labor. 2. The impact of diminishing marginal returns on labor is, the level of production in which the marginal product of labor decreases as the number of workers increases. 3. An example of a fixed cost is, a cost that does not change, no matter how much of a good is produced, and the variable cost of a bakery is, when the price falls as less is produced. 4. A firm calculates marginal cost by, seeing the cost of producing one or more unit of a good.

5.3 Outline:
 * Subsidy is a government payment that supports a business or a market.
 * Excise tax is a tax on the production or sale of a good.
 * Regulation is a government intervention in a market that affects the production of a good.
 * A fall in the cost of an input will cause an increase in supply at all price levels.
 * Marginal cost includes the cost of the inputs that go into production.
 * As prices for fossil fuels have risen, electric companies have looked to alternative sources of supply, such as wind.
 * Many firms locate in cities because of the rich variety of workers and business services available in urban areas.

Test Review Questions (3): 1. How does marginal product of labor change as more people are hired? 2. What categories of costs combine to create a forms total cost? 3. Name and describe three factors that can cause a change in supply.