Smart Economics Lessons 1-3

Who has the role of buying good and paying for services in an economy

• Economist

• Consumer

• Producer

• Analyst

When someone opens a cupcake bakery, what role would they play in the economy?

• researcher

• economist

• analyst

• producer

One way to determine the strength of the economy is to watch how consumers and producers are acting. When can an economy be considered strong?

• when consumer spending is low

• when consumer spending is high

• when producer spending is high

• when production of goods is low

What is a sign of a strong economy?

• Prices of good and services are rising quickly

• Factories are expanding and restaurants are doing well

• Unemployment rate is high since many people

• House price drop since people are not buying them

As a business owner, Ella analyzed the economy to determine if it is a good time to open a new shop. What facts probably helped her realize that is a good time do it?

• Low unemployment rate and prices are rising quickly

• High unemployment rate and prices are rising quickly

• Few homes are being sold and restaurants are closing

• Prices aren't changing and factories are shrinking

What is an example of a market economy?

• When government agencies set prices of goods and service

• When businesses set prices based on what they want to earn

• When consumers only buy goods and services in a market not a mall

• When the law of supply and demand sets prices of goods and services

In a market economy, what is supply?

• Goods and services that are offered by producers

• Goods and services that are offered by consumers

• Consumers who buy goods and services

• Producers who buy goods and services

How does the law of supply and demand affect a consumer?

• It can affect the production costs when consumers make things

• It has no affect on the consumer since they are not demanding things

• It can affect the price and availability of goods and services

• It has no affect on the consumer since they are only supplying things

If an item is scarce, how does this affect how it is priced in a market economy?

• The price will decrease

• The price will increase

• The price will not change

• The price will be up and down

Rylan has a clothing store and he has managed to get the only pair of sneakers that everyone wants to buy. How is he most likely going to price these shoes?

• He will keep the price the same as his other shoes to be fair

• He will lower the price since the demand is very low and there is surplus

• He will raise the price since demand is high and supply is scarce