Market Economy
What type of economy allows consumers and producers to make their own choices?
Market economy
What do we call the amount of a good or service that producers are willing to sell at various prices?
Supply
What is demand?
The quantity of a good or service that buyers are willing and able to purchase at various prices.
What is a labor union?
An organization that represents workers in negotiations with employers.
How would a shortage of a popular toy during the holiday season affect its price?
Name one type of business that plays a key role in a market economy.
Corporation
If the price of a product goes up, what usually happens to the supply of that product?
It increases
If more consumers want a product, what happens to its demand?
It increases
What is one goal of a labor union?
To secure better working conditions, better wages, etc.
If a new technology reduces production costs, what might happen to the supply of the product?
The supply would likely increase!
In a market economy, what is a key factor that determines the prices of goods?
How do producers decide how much of a product to supply?
They base it off the demand for that product (or similar answers!)
Name one factor that can cause a shift in demand.
Buyer income, price of the product, change in preferences, etc.
Why might workers choose to join a labor union?
To have a collective voice in negotiations (or similar answers!)
Why is the distribution of resources important in a community?
It ensures that all members have access to necessary goods and services (or similar answers!)
Identify one factor of production that is crucial for a market economy to function. (Hint: Think back to Part 1 of this unit!)
Labor, capital, resources, natural resources, entrepreneurs - there may be more!
What would happen to supply if there was a natural disaster affecting production?
It would decrease.
Why is understanding demand important for businesses?
It helps them to set their prices, and plan production or supply (or similar answers!)
What role do labor unions play in economic interdependence?
They help balance power between workers and employers, affecting production and resources (or similar answers!)
Give an example of how supply and demand can affect a local business.
Many different answers will work!