Chapter+5

5.1 Take Notes Answer questions #1-6 on p g. 106

-Supply is the amount of goods available and the law of supply tells us that the higher the price, the larger the quantity produced. -Quantity supplied is a term used to describe how much of a good is offered for sale at a specific price. -As prices go up so will supply, as price falls supply quantity falls too. -A supply schedule shows the relationship between price and quantity supplied for a specific good. -A market supply schedule is used to show the relationship between prices and the total quantity supplied by all firms in a particular market. A supply curve is horizontal measuring the quantity of the good supplied.


 * 1) If the price of a good goes up then the amount of that good will in turn go up to meet demand.
 * 2) Supply is the amount of goods that are there and ready to be sold while quantity supplied is how much of a good is offered for sale at a specific price.
 * 3) The quantity supplied of a good with a large elasticity of supply will raise its prices in a situation where prices change.
 * 4) If the oil prices rise around the world then oil production in texas will rise as well to take advantage of the higher prices.
 * 5) A. Inelastic becuase if prices rise for hotel rooms all we can really do is just make the rent higher not create more rooms. B. Elastic because if more people need taxi rides then the workers will get more hours and the quantity will go up. C. Unitary elastic because if the prices go up then the amount of pictures will to and the demand is exactly one in this case.
 * 6) Entrepreneurs may want to do this becuase should the demand suddenly fall then they wont take a huge finacial toll for them and its all about risks in the society we live in today.

5.2 Answer questions #1-6 on p g. 114

B. Variable because should something happen to the supply then prices will go up. C. Fixed because it is always bought in bulk. D. Fixed because your the one hiring them. E. Fixed, prices almost never change.!!
 * 1) The more workers that are hired the more the marginal product of labor will change and production will rise up to a certain point and from there production will actually go down.
 * 2) Companies will begin to let people go as a result of diminishing marginal returns.
 * 3) A fixed cost would be rent and a variable cost would be the ingredients they are using.
 * 4) Marginal cost is is calculated by by knowing the total cost at several levels of output.
 * 5) The factory with the smaller place because they have less jobs to go around as opposed to the larger factory.
 * 6) A. Variable cost because the cost of labor always depends on how the business is doing and who you hire.