Unlocking Supply: Exploring the Factors that Shift the Curve

Economics Grades High School 6:58 Video
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Lesson Description

This lesson explores the factors beyond price that influence the supply curve, including input costs, related goods, number of suppliers, technology, and future price expectations.

Video Resource

Factors affecting supply | Supply, demand, and market equilibrium | Microeconomics | Khan Academy

Khan Academy

Duration: 6:58
Watch on YouTube

Key Concepts

  • Supply Curve Shifts
  • Price of Inputs
  • Price of Related Goods (Substitutes in Production)
  • Number of Suppliers
  • Technology
  • Expected Future Prices

Learning Objectives

  • Students will be able to identify and explain the factors that cause shifts in the supply curve.
  • Students will be able to analyze how changes in input costs, related goods' prices, number of suppliers, technology, and expected future prices affect the quantity supplied.
  • Students will be able to apply their understanding of supply-side factors to real-world scenarios.

Educator Instructions

  • Introduction (5 mins)
    Begin by reviewing the Law of Supply (as mentioned in the video description). Ask students to give examples of how price affects supply. Then, introduce the idea that factors other than price also influence supply.
  • Video Viewing (15 mins)
    Play the Khan Academy video 'Factors affecting supply | Supply, demand, and market equilibrium | Microeconomics | Khan Academy.' Instruct students to take notes on the key factors discussed.
  • Discussion & Explanation (20 mins)
    After the video, lead a class discussion to reinforce the concepts. Go through each factor (price of inputs, price of related goods, number of suppliers, technology, expected future prices) and clarify any points of confusion. Use real-world examples to illustrate each factor. For example: * **Price of Inputs:** How would a rise in fertilizer costs affect the supply of corn? * **Price of Related Goods:** If the price of wheat increases, how might that affect the supply of barley (assuming farmers can grow either)? * **Number of Suppliers:** What happens to the overall supply of electric cars as more companies start manufacturing them? * **Technology:** How did the invention of the assembly line affect the supply of automobiles? * **Expected Future Prices:** If oil producers expect oil prices to double next year, how might that affect the current supply of oil?
  • Activity: Supply Curve Scenarios (15 mins)
    Divide students into small groups and provide each group with different scenarios. Each scenario should describe a change in one or more of the factors affecting supply. For example: * A new regulation increases the cost of producing lumber. * A new farming technique doubles the yield of soybeans. * The price of natural gas is expected to rise sharply in the coming months. Each group should analyze the scenario and explain how the change will affect the supply curve for the good or service in question (i.e., will it shift left or right?). They should also explain their reasoning.
  • Wrap-up & Assessment (5 mins)
    Review the key concepts and answer any remaining questions. Administer the multiple-choice and fill-in-the-blank quizzes to assess student understanding.

Interactive Exercises

  • Supply Curve Simulator
    Use an online supply and demand simulator (if available) to allow students to manipulate different factors affecting supply and observe the resulting shifts in the supply curve. This provides a visual and interactive way to reinforce the concepts.

Discussion Questions

  • How does a change in the price of a raw material affect a company's willingness to supply a finished product?
  • Why is it important for businesses to consider expected future prices when making supply decisions?
  • Can you think of a recent example of a technological innovation that significantly increased the supply of a particular good or service?

Skills Developed

  • Critical Thinking
  • Analytical Skills
  • Economic Reasoning
  • Problem-Solving

Multiple Choice Questions

Question 1:

Which of the following factors would NOT directly cause a shift in the supply curve for a product?

Correct Answer: A change in the price of the product itself.

Question 2:

If the price of steel, a key input in car manufacturing, increases, what is the most likely effect on the supply of cars?

Correct Answer: The supply of cars will decrease.

Question 3:

A farmer can grow either wheat or corn. If the price of wheat increases, what is the likely effect on the supply of corn?

Correct Answer: The supply of corn will decrease.

Question 4:

What happens to the market supply curve when the number of firms producing a particular good increases?

Correct Answer: The supply curve shifts to the right.

Question 5:

How does a technological improvement that reduces the cost of production affect the supply curve?

Correct Answer: It shifts the supply curve to the right.

Question 6:

If oil producers expect the price of oil to rise significantly in the future, what is the likely effect on the current supply of oil?

Correct Answer: The current supply of oil will decrease.

Question 7:

A subsidy (government payment) to producers will cause the supply curve to:

Correct Answer: Shift to the right.

Question 8:

An increase in the cost of labor will cause the supply curve to:

Correct Answer: Shift to the left.

Question 9:

If a tax is placed on a product, what happens to the supply curve?

Correct Answer: Shifts to the left.

Question 10:

A decrease in the number of suppliers in a market will cause the supply curve to:

Correct Answer: Shift to the left.

Fill in the Blank Questions

Question 1:

The cost of resources used to produce a good or service is known as the price of _________.

Correct Answer: inputs

Question 2:

Goods that can be produced using the same resources are called _________ in production.

Correct Answer: substitutes

Question 3:

The total amount of a good or service that all producers are willing and able to offer at various prices is known as __________ supply.

Correct Answer: aggregate

Question 4:

Advancements in __________ can lead to increased efficiency and lower production costs, shifting the supply curve to the right.

Correct Answer: technology

Question 5:

If producers expect the price of their product to increase in the future, they may _________ their current supply.

Correct Answer: reduce

Question 6:

If a new tax is imposed on producers, the supply curve will shift to the _________.

Correct Answer: left

Question 7:

A government _________ to producers effectively lowers their costs, causing the supply curve to shift to the right.

Correct Answer: subsidy

Question 8:

An increase in the number of sellers in a market will cause the _________ to increase.

Correct Answer: supply

Question 9:

The law of supply states that as price increases, quantity supplied _________.

Correct Answer: increases

Question 10:

Factors other than price that cause a change in supply will cause the entire _________ curve to shift.

Correct Answer: supply

Educational Standards

SOC.9-12.E.3.1:Analyze how price and non-price factors affect the demand and supply of goods and services available in the marketplace. SOC.9-12.E.2.2:Describe the role of the factors of production, land, labor, capital, entrepreneurship, and technology as well as the place of imports and exports in economic systems. SOC.9-12.E.1.1:Define and apply basic economic concepts of money supply, scarcity, surplus, choice, opportunity cost, cost/benefit analysis, risk/reward relationship, incentive, disincentive, and trade-off to a variety of economic situations.

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