Activity 3.2 Supply Quiz

Activity 3.2
Supply Quiz


Why is it that weather disasters in the United States and around the world affect the prices of our food and clothes?	Why do some collectibles have a high value while others do not?

The answers to these questions have a lot to do with supply. Just as the demand affects the price you have to pay for a good or service, so does the supply. This tutorial is designed to help you understand the role that supply plays when determining the price of goods and services.

In order to receive a good score on Activity 3.2, you will definitely want to review the information provided in this tutorial.

The first concept to understand about Supply is the Law of Supply. This is not a law in the legal sense of the word but rather a statement of how the price of a good will affect the quantity supplied of the good.

The Law of Supply:
All things being equal (ceteris paribus) as the price of an item increases, the quantity supplied will increase. As the price of an item decreases, the quantity supplied will decreases. The Law of Supply states that when the selling price of an item rises, more people will produce the item. Since a higher price means more profit for the producer, as the price rises, more people will be willing to produce the item when they see that there's money to be made.

Part A: What is Supply ?
Supply is defined as the amount of goods or services that a producer is willing to sell at a given price. As you view the tutorial below, become familiar with the following terms: supply, quantity supplied, supply schedule, supply curve, and determinants of supply. It is recommended that you take notes on this information and place them in your portfolio. Remember Bob, from our Demand tutorial? Well now he has graduated college with a degree in business. He is planning on producing his own line of clothing. (Yes, he is trading in his black polyester shirt) How will the concept of supply affect his business? Click on Bob below to see for yourself...... (http://ecedweb.unomaha.edu/Dem_Sup/supply.htm)
Part B: Reading a supply schedule and supply curve
A supply curve is a graphical representation of the vocabulary listed above. Knowing how to analyze a supply curve will help you understand how prices of goods and services are determined. A sample supply schedule and supply curve has been placed in the Media Center. Helpful hints on how to interpret a supply curve are provided. Click on the image below to access this tutorial. (Supply Tutorial - 3_2a.htm)
Let's see what you have learned about Supply!
After going through Part A and B above, perhaps now you better understand the concept of supply. Your final task for Activity 3.2 is to take the Supply Quiz.

	Activity 3.2 Supply Quiz 50 Points
	Go to the Assignment Area to take the Supply Quiz.