Wednesday, January 12, 2011

Honors Business Economics: 13 January 2011

Beyond the sound bites Current Events (after the Quiz):

Today is the Ch. 4 Sec. 1 Quiz.

Clear your desk except for a pencil. Once everyone is quiet, and no talking during the Quiz, we can begin. Be sure to put your name on the Quiz and the Scantron. You may write on both the Quiz and the Scantron.

If you finish early, you may take out non-class materials; once everyone is finished, put away the non-class materials. Then, I will collect the Scantron first, and then I will collect the Quiz.

Be sure your name is on both the Scantron and the Quiz.

If your name is not on the Quiz it will not be returned.

The Chapter 3 Section 3 Make-Up is available.

The Ch. 3 Sec. 2 Quiz Make-Up is today:


The Make-Up for the Chapter 3 Section 1 Quiz is today.

The Chapter 2 Make-Up Test is today.


The Ch. 2 Sec. 3 American Free Enterprise Make-Up Quiz is today.

Standard feature:

The electronic edition of the Philadelphia Inquirer is available. We have the Sunday edition, available on Mondays, in addition to the Tuesday through Friday editions on the other days.

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Click on the words "Access e-Inquirer" located on the gray toolbar underneath the green locker on the opening page.
Password: 10888

Chapter 5: Supply

Section 3: Cost, Revenue, and Profit Maximization

Cost and revenue are added to the theory of production. Several important measures of cost are introduced, including fixed cost, variable cost, total cost, and marginal cost. Total revenue and marginal revenue are the most important measures of revenue. The firm reaches the break-even point when the revenue from sales is large enough to cover the total cost of production. Furthermore, the firm finds its profit-maximizing quantity of output where the marginal cost of production is exactly equal to marginal revenue from the sale of the product.

Reading Strategy

Complete the graphic organizer below by explaining how total revenue differs from marginal revenue. Then provide an example of each.

Guide to Reading

Section Preview

Content Vocabulary

fixed costs

Fixed Costs, Revenue, Break-even point

What are fixed costs? As applied to sneakers, explain fixed costs. Draw a sample graph as demonstrated in the video. Do the costs stay constant? Then, draw the second graph to understand the cost function. What if the cost is not stagnant? What is the difference between a linear and a non-linear revenue function? What is the formula for profit? What is the intersection of revenue and cost called?


variable costs

Marginal Cost and Average Variable Cost

Draw the one graph demonstrated here. What is the first point that you should look for on the variable cost curve? When does the marginal curve reach a minimum? Where does the variable cost reach?

total costs

4th to enjoy

Micro average total cost, 8:25

In-class assignment, working with a partner, answer the following questions.

What elements (they start from the very beginning of the clip) add up to the total cost?
As we add units, is the total cost going up, or down?
What happens when you add the fourth unit?
Do we have decreasing marginal return?
How much is the average total cost when we add the fourth unit?
Do the 5th and 6th units add to our production costs?
Why do production costs rise?

marginal costs

Deriving the Marginal Cost Curve, 3:12

In-class assignment, with a partner, answer the following questions.

Draw the marginal cost curve.
Why does the marginal cost of production vary as you change the quantity you are producing?


e-commerce - evolution, 6:52

In-class assignment, with a partner, answer the following questions.

How has commerce changed over the years?
What happened in 1994?
What happened in the early days? What was it like then?
What happened with growth?
What do we expect to happen when looking ahead?
Summarize the first ten years in ecommerce.

break-even point

total revenue

marginal revenue

marginal analysis

profit-maximizing quantity of output

Companies in the News

FedEx Saves the Day

Measures of Cost

Fixed Costs

Variable Costs

Figure 5.6 Production, Costs, and Revenues

Total Cost

Marginal Cost

Reading Check


If a firm's total output increases, will the fixed costs increase? Explain.

Applying Cost Principles

Costs and Business Operation

Break-Even Point

Reading Check


What are the differences between an e-commerce store and a traditional business?

The Global Economy and You

Marginal Analysis and Profit Maximization

Total Revenue

Marginal Revenue

Marginal Analysis

Profit Maximization

What do economists assume about businesses?
What is the formula?
How do firms maximize profits?
How do firms in perfect competition perform?

Reading Check


Why do people, especially business owners, use marginal analysis?

Steve and Barry's Rules the Mall

In-class assignment, with a partner, fill in the graphic organizer.

Use the graphic organizer to identify examples of both fixed and variable costs.

Ch. 4 Prep


Multiple Choice Quiz


Crossword Puzzle




Ch. 5 Prep

Chapter 5 Supply Multiple Choice Quiz


Chapter 5 Puzzle


Chapter 5 Supply Flashcards


Economics, 3:06

Email (or hand in hard copy) to

The Ch. 4 Sec. 1 Quiz Make-up is available.

Thursday HW
1. p. 125, #3-5

Friday HW
1. p. 125, #6-8