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law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
law of supply
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law of supply

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  • 1. What is the minimum, per hour I would have to pay you to work at Subway? MANKIW CHAPTER 4 ALL WEEK Pretend there is no minimum wage and you could work for less than $7.50
  • 2. Law of Supply • As the price of a good increases, producers will produce more (,or try to) quantity. As the price of the good decreases, producers will produce less quantity. P Q and P Q The supply curve is always upward sloping $ Q S
  • 3. Push ups market: A Supply Curve Price of pushups Number of pushup Sellers 1 QE 2 QE 3 QE 4 QE 5 QE Graph on board
  • 4. Graph one: A Supply Curve Price of Widgets Number of Widgets Sellers Want to Sell $1.00 10 $2.00 40 $3.00 70 $4.00 140
  • 5. For example…. • Average prices of • Therefore…..
  • 6. For example….
  • 7. Producer Surplus • Difference between cost and sale price • IOW: profit • Sale: $15 • Cost: $10 • PS = $5
  • 8. If price changes Q*supply, What changes supply?
  • 9. 4 Determinants of Supply • Price of production + or - • Taxes, regulation, raw materials, labor
  • 10. 4 Determinants of Supply • Expectations • If future P$ might rise, hold inventory • If future P$ might fall, increase supply
  • 11. 4 Determinants of Supply • Sellers (increase or decrease)
  • 12. 4 Determinants of Supply • Technology
  • 13. 4 Determinants of Supply Mnemonic • Price of Production • Expectations • Sellers (#) • Technology •PEST = supply determinants •TRIBE = demand determinants
  • 14. Diff between supply and Demand Xbox games • Supply or demand change? • Determinant
  • 15. Diff between supply and Demand Wheat • Supply or demand change? • Determinant locusts
  • 16. Diff between supply and Demand New cars • Supply or demand change? • Determinant
  • 17. Diff between supply and Demand Used clothing • Supply or demand change? • Determinant
  • 18. Diff between supply and Demand Dog food • Supply or demand change? • Determinant
  • 19. Diff between supply and Demand Dog food • Supply or demand change? • Determinant
  • 20. Diff between supply and Demand Salsa • Supply or demand change? • Determinant
  • 21. Diff between supply and Demand Salsa • Supply or demand change? • Determinant CLOSED
  • 22. Diff between supply and Demand Salsa • Supply or demand change? • Determinant
  • 23. Diff between supply and Demand Insurance plans • Supply or demand change? • Determinant
  • 24. TRIBE Assignment due next Tuesday For each part of the: Formulate two scenarios and graph For example: Beef market Consumers see news story about mad cow disease

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