chapter+5

chapter 5.1 notes Questions b) taxi rides- depending on where you are it could be either, a large city needs public transpotation while a small one does not rely on it as much. c) photographs- elastic because people will not pay really high prises for something they can do themselves.
 * 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 to supply at a certain price
 * supply schedule- a chart that lits how much of a good a supplier will offer at different prices
 * variable- a factor that can change
 * market supply schedule- a chart that lits how much of a good all suppliers will offer at different prices
 * supply curve- a graph of quantity supplied of a good at different prices
 * market supply curve- a graph of the quantity supplied of a good by all suppliers at different prices
 * elastic of supply- a measure of the way quantity supplied reacts to a change in price
 * 1) When the price of a good rises then companies make more of it to earn additional revenue.
 * 2) The difference between supply and quantity supplied is that supply is the amount of goods available while quantity supplied is the amount a supplier is willing and able to supply at a certain price.
 * 3) The quantity of a good with a large elasticity of supply will react very dramatically to price changes.
 * 4) If the price of oil raises around the world then oil production should increase to help compensate for the difference in price for the united states.
 * 5) a) hotel rooms- inelastic because people will always need to stay in hotel rooms

Chapter 5.2 questions
 * 1) The marginal product of labor changes when more workers are hired by having a higher production rate from the additional unit of labor.
 * 2) The impact of diminishing marginal returns on labor is the amount of product labor decreases with the number of workers increasing.
 * 3) An example of a fixed cost at a bakery could be the rent the owner has to pay for the building space and a variable cost is something like running the oven more one month will increase the price for electricity.
 * 4) A firm calculates marginal cost by adding the cost of another product to the amount of money they have to spend each day in manufacturing. Every time they increase the amount of additional products on top of that the cost of each single one will go down.

chapter 5.3 notes Test Question
 * subsidy- a government payment that supports a business or market
 * excise tax- a tax on the production or sale of a good
 * regulation- government intervention in a market that affects the production of a good
 * high levels of inflation like 70 percent annual price increases affecting turkey, can cause suppliers to hoard their goods to sell later at a higher price
 * 1) What are two input costs? Two input costs could be effect of rising costs and technology.
 * 2) Which way will the supply shift move if there is an increase in supply? An increase in supply will shift the curve to the right.
 * 3) Name a factor when considering changes in supply. Another factor could be the number of suppliers that produce the same thing.