Economic Units
A household earns a salary, buys groceries, and deposits money into a bank. Which role is the household performing when it buys groceries?
Consumer
A farmer owns land but has no workers to harvest crops. Which factor of production is missing?
Labor.
Why do banks pay customers interest on deposits?
To encourage saving and attract deposits.
Why should a producer learn what consumers want before making a product?
To make products people are likely to buy.
A customer buys food that is unsafe to eat.
Which consumer right has been violated?
The right to be safe when using goods and services.
A new coffee shop opens in your town. Describe two ways this single business could benefit households besides simply selling coffee.
A company buys ten new machines but keeps the same number of workers. Explain how this investment might increase production.
Capital allows workers to produce more efficiently or more quickly.
A business owner borrows money even though they already have some savings. Explain one reason this could still be a good decision.
Allows faster growth, preserves cash flow, buys equipment sooner, etc.
A group selling sandwiches notices that chicken sandwiches sell much faster than tuna sandwiches.
What should the group probably do the next day?
Explain.
Make more chicken sandwiches and fewer tuna sandwiches.
A business advertises that its juice will make students "twice as smart."
Which consumer right protects people from this kind of false advertising?
The right to receive honest information.
A bank approves a loan for a bakery. Explain how this decision could eventually benefit a household that never borrowed any money.
The bakery can expand, hire more workers, buy more supplies, lower prices through increased production, or create more opportunities for households.
Two businesses make identical burgers.
Restaurant A hires skilled cooks.
Restaurant B buys expensive kitchen equipment.
Which factor of production has each business invested in?
A → Labor
B → Capital
A country suddenly removes all taxes.
Identify one short-term benefit and one long-term problem.
Benefit:
Problem:
Your group has long lines at lunchtime because preparing each order takes too long.
Name one change that could improve your production.
Examples:
A student works after school at a café. Before starting, the owner explains their pay, working hours, and job duties in writing.
Why is this important?
It creates a fair employment contract so both the employer and employee understand their rights and responsibilities.
A government builds a new highway connecting farms to a city. Explain how three different economic units benefit from this project.
Government improves infrastructure; firms transport goods faster; households gain jobs and cheaper goods; banks may finance expansion.
A bakery buys two new ovens but does not hire any new workers.
Which factor of production has the bakery increased?
Capital
A business must pay VAT, wages, rent and loan interest.
Which of these costs are most likely to increase the price consumers pay? Explain.
Any of them can increase prices because businesses often pass higher costs to consumers.
Two booths sell the same cookies.
Why might some customers still choose Booth B?
Consumers also care about quality, safety, cleanliness, and service—not just price.
A customer buys a broken blender. The shop refuses to repair it, replace it, or refund the money, even though the customer has proof of purchase.
Which consumer right has been violated?
The right to receive compensation.
A town has no banks. Predict two problems this would create for households and two problems for firms.
Households:
Firms:
A restaurant is becoming very popular. The owner has enough money to make one improvement.
Should they:
Explain which choice would help the business most.
Answers could be:
Two governments collect the same amount of tax.
Government A spends it mostly on roads and schools.
Government B leaves most of it unused.
Which economy is more likely to grow over time? Explain why.
Government A because productive public spending supports businesses, workers and investment.
Your group made much less profit than expected.
Give two producer decisions you would investigate before making changes next time.
Possible Answers
A producer wants customers to trust their business.
Name two actions the producer could take to protect consumers' rights.
Possible Answers