Ch5SGH.docx - Chapter 5 Study Guide Name:_ 5.1 Key Terms:...

Chapter 5 Study Guide Name:____________________________
5.1
Key Terms:
Supply – how much of a good producers are willing and able to offer for sale per period at each price,
other things constant
law of supply – the quantity supplied is usually directly, or positively, related to its price, other things
constant
supply curve - shows the quantities of a particular good supplied at various prices during a given time
period, other things constant
elasticity of supply – equals the percent change in quantity supplied divided by the percent change in
price
Think Critically:
1. In what ways do the motives of a pizza restaurant owner differ from the motives of customers
who buy the restaurants’ pizza?
2. Why should the quantity of winter jackets supplied increase when there is an increase in the
price of the jackets?
Graphing Exercise:
3. The owner of a shoe store reviewed her costs to determine how many pairs of running shoes she
would be willing to supply each month at different prices. The results of her research appear in the
supply schedule shown here. Use these data to draw her supply curve for running shoes. Explain how
the graph demonstrates the law of supply.

Chapter 5 Study Guide Name:____________________________
10 20 30 40 50 60 70 80 90 100 110
0
10
20
30
40
50
60
70
80
70
60
50
40
30
Supply of Running Shoes
Quantity Supplied
Prices
The graph demonstrates the law of supply because it shows how the lower the price is, the less products
you will be supplied and the higher the price, the more products you will be supplied.
6. The table below shows how much cheese three dairies in a small community supply each month at
the current price of $3.00 per pound. It also shows how much each one would supply if the price