What Factors Affect Supply

5.3 RETEACHING ACTIVITY What Factors Affect Supply? Classifying Economic Factors and Applying Economic Concepts Background Knowledge Remember, change in supply causes the supply curve to shift to the right with an increase in supply or to the left with a decrease in supply; changes in supply occur because of changes in input costs, productivity, technology, producer expectation, or number of producers, or due to government action. Directions: Read each of the situations below and decide which of the six factors it best illustrates. Write the characteristic in the box, then tell what will happen to supply. You may want to look at "What factors affect supply guided reading" 1. A software company invests in a set of fast, new computers that allow employees to test their new programs easily and quickly. Which factor is this and how will it affect supply? Characteristic: Technology What happens to supply? perincrease (shift Right) 2. A farmer is deciding how much tobacco and how much corn to grow on the farm. Congress recently cut the subsidies that it pays farmers to raise tobacco. Which factor is this and how will it affect supply of both crops? Characteristic: Gou't Action What happens to supply? Decrease (tobacco); left Supply if (corn) will invenciight 3. A tool-making company hires several workers who got degrees from a technical school, where they learned manufacturing techniques. Which factor is this and how will it affect supply? Characteristic: Productivity What happens to supply? Increase; Right 4. A pancake restaurant is successful in a downtown mall. Another pancake restaurant opens up in a building across from the mall parking lot. Which factor is this and how will it change supply? Characteristic: Chonse in th of producers What happens to supply? Supply will increase 5. You make a canned beverage for dieters that contains an extract from a plant. A law firm is bringing a lawsuit against another company that makes energy bars with this extract. They claim that the plant extract is harmful. Which factor is this and how will it change supply? Characteristic: Change in producer expectation . What happens to supply? decrare; left 6. You own a company that makes wire. The price of copper has recently gone up. Characteristic: Input-Costs What happens to supply? Decieuse; left 7. You are a tea distributor. You have heard rumors that a new scientific study will soon announce that tea contains unique compounds that help prevent cancer. What factor is this and how will it change supply? Characteristic: Chry. Prod. Expectatis What happens to supply? Incose, Right Application 22222 22 8. How did the business owner try to change supply, and what was the result? Business owner eliminated coffee. breaks, to increase the amount of time people spent working; however, without the caffeine, workers become less efficient because they fell asleep. 9. How would the supply curve change because of the situation in the cartoon? Shift to the left because of the deercase pridichisty The plan to increase productivity by