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Supply

​WEEK 4

Markets

Supply 
You will learn about:
  • the law of supply, individual and market supply, the supply curve
  • the factors affecting supply – price/cost of factors of production, prices of substitutes and complements, expected future prices, number of suppliers, technology
  • movements along the supply curve and shifts of the supply curve

You will learn to:
Examine economic issues
  • identify how business and governments can use information from the market
  • ​examine the nature of competition in markets characterised by oligopoly and monopoly​
​
Apply economic skills
  • graph a supply curve 
  • identify reasons why government may intervene in certain markets
​
Traditional economics sets out some  basic premises. Let's think these through and see where they are happening in our everyday lives.
  • Supply is a function of input price and demand.
  • A business will generally supply more of a good when the market can afford a higher price.
  • Businesses operate in industries or geographical areas which also help determine their viability.
  • There are different models of competition.
  • The market will signal to a business if their good or service is profitable.
  • Not all businesses are motivated by profit.
  • When it is unprofitable for businesses to provide some goods and services, governments need to intervene.

What is driving the big decisions of production?

​Emergent order is overtaking the production decisions of economies. See here for a quick understanding:

How does emergent behaviour look? Mindmap how it moves through to different sectors and behaviours.

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What does your supply curve look like?

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List the SHIFTERS of the supply curve.

​Let's consider a global supply curve:

Let's follow the production of an ordinary everyday product: the T-shirt.

The supply curve is just the tip of the iceberg. The supply chains behind everything we buy vary from a straightforward grower or maker to the consumer to an incredibly complex one where the product moves through hundreds of hands. There really is a world behind everything that we need to explore to really understand the notion of supply in economics.
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Reference: PLANET MONEY MAKES A T-SHIRT
Episode 503: Adding Up The Cost Of The Planet Money T-Shirt
​
In all, each shirt cost us about $12.42. We open up the books and explain how that breaks down — how much went to cotton, how much went to the workers in Bangladesh, and how much went places we would never have imagined.
If you're into spoilers, here's a graph that lays out all the costs. (Note: Many of these figures are estimates. It turns out, even when you're ordering 24,470 T-shirts, people won't tell you exactly how much everything costs.)

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​After watching these Planet Money clips, answer these questions:

1. List 5 factors that influence the supply of T-shirts.

2. In particular, identify 3 non-price factors which influence supply.

3. Give examples for each of the four factors of production, i.e. natural resources, labour, capital and enterprise.

4. If a Bangladeshi worker receives a third of the wages of a Columbia garment worker, what prediction can you make?

​5. Bangladesh’s GDP growth rate is forecast to be 8% in 2020  and the figures put it ahead of other Asian countries, including India.  It could shed its 'least developed country' status in five years (Source: WEF) which means it will be moved out of the category of least developed country. How could this change Bangladesh's willingness to work at such low rates?

​6. Watch the clip below and discuss how supply chains might change.

Try this quick quiz on the costs of production to check your understanding:

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Share what you have learned.

Write a response in the padlet below that identifies reasons why government may intervene in certain markets Use this avocado case study to produce a sophisticated and well reasoned response. Click on the headline to read the full article.
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Made with Padlet

Supply strain—how will the coronavirus affect global supply chains?

​ The Economist's weekly podcast on the markets, the economy and the world of business

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  • Home
  • Assessment
    • Y11
    • Y12
  • FOR TEACHERS
  • Preliminary
    • THE ECONOMICS OF EVERYTHING >
      • WEEK 1
      • WEEK 2
      • WEEK 3
      • WEEK 4
      • WEEK 5
      • WEEK 6
      • WEEK 7
      • WEEK 8
      • WEEK 9
      • WEEK 10
      • WEEK 11
    • CURIOUS CHOICES >
      • WEEK 1
      • WEEK 2
      • WEEK 3
      • WEEK 4
      • WEEK 5
      • WEEK 6
      • WEEK 7
      • WEEK 8
      • WEEK 9
      • WEEK 10
    • THE WORLD IS NOT FLAT >
      • WEEK 1
      • WEEK 2
      • WEEK 3
      • WEEK 4
      • WEEK 5
      • WEEK 6
    • TO INFINITY AND BEYOND >
      • LABOUR MARKET INSTITUTIONS
  • HSC
    • THE GLOBAL ECONOMY >
      • INTEGRATION
      • TRADE
      • ECO DEVELOPMENT
    • AUSTRALIA'S PLACE IN THE GLOBAL ECONOMY >
      • AUS TRADE & FIN FLOWS
      • EXCHANGE RATES
      • PROTECTION IN AUS
    • ECONOMIC ISSUES >
      • ECONOMIC GROWTH
      • UNEMPLOYMENT
      • INFLATION
      • EXTERNAL STABILITY
      • INCOME & WEALTH
      • ENVIRONMENT
    • ECO POL & MMENT >
      • OBJECTIVES
      • FISCAL POLICY
      • MONETARY POLICY
      • MICRO POLICIES
      • LABOUR MKT POLICIES
      • ENVIRONMENTAL POLICY
      • LIMITATIONS
  • Contact