Supply and Demand
What happens to price when demand goes up but supply stays the same?
Price increases.
Define monopoly.
One seller controls the entire market.
Define opportunity cost.
The value of the next best alternative forgone.
General increase in prices over time.
Define profit
Revenue minus profits
If the price of ice cream goes down, what happens to the quantity people want to buy?
The quantity demanded increases.
Give 2 examples of oligopolies in the U.S. today.
Airlines, cell phone carriers, auto industry.
What’s the opportunity cost of going to college right after high school?
Lost wages from working full-time.
What happens to the value of money when inflation rises?
it decreases
Why do businesses take risks?
To earn profit.
Explain what happens to equilibrium price if supply increases.
Equilibrium price decreases.
What type of competition describes the fast-food industry?
monopolistic competition
Explain how scarcity forces choices.
Limited resources mean people must make trade-offs.
Why did $1 pizza disappear in NYC?
Costs of ingredients, rent, and wages increased.
How does competition benefit consumers?
Lower prices, better quality, more choices.
Give a real-world example of a shortage.
Example: Toilet paper shortage in 2020.
Why does perfect competition usually lead to lower prices?
Many sellers offer identical products, so no one can raise prices.
What is an example of scarcity during COVID pandemic?
Examples: toilet paper, eggs, milk, paper towels, baby formula,
Explain cost-push vs. demand-pull inflation.
Cost-push = rising production costs. Demand-pull = more demand than supply.
What athlete was behind the Air Jordan ?
Michael Jordan (basketball)
Explain price ceiling with an example.
Government sets a maximum price below equilibrium (e.g., rent control), causing shortage.
Compare monopoly and monopolistic competition.
Monopoly = one seller, no competition. Monopolistic = many sellers, products slightly different.
Apply opportunity cost to the $1 pizza lesson.
Keeping $1 pizza meant owners gave up higher profits to cover rising costs.
Give 2 groups who benefit and 2 who are hurt by inflation.
Benefit: borrowers, businesses with fixed costs. Hurt: savers, lenders, fixed-income earners.
Create a scenario involving supply, demand, and price.
Example: Sneakers become trendy → demand increases → price rises.