No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Four: Supply 85 DESIRED LEARNING OBJECTIVES At the conclusion of this chapter, the student should be able to... § § Describe how supply is inextricably linked to opportunity cost § § Explain what arbitrage is, and how it is essential to guide production § § Summarize the subjective nature of costs; that costs are not objective § § Outline the economic rationale for the shape of marginal cost curves § § Contrast a change in supply with a change in quantity supplied § § List the factors which cause a change in supply § § Describe how producer surplus is determined § § Summarize how a market supply curve is derived from individual supply curves § § List factors affecting the elasticity of supply § § Define the following time periods: Market, Short Run, Long Run