Economics Basics — Answer Key
Part A: Fix the Sentence
Each sentence has an error. Rewrite it correctly on the line.
1. Fix the sentence:
Saving means spending all your money at the store right away.
Corrected: Saving means keeping some of your money to use later.
Spending all your money right away is the opposite of saving. Saving means keeping some money so it can be used at a later time.
2. Fix the sentence:
A teacher provides a good to students in the classroom.
Corrected: A teacher provides a service to students in the classroom.
A teacher is not handing students a physical item to take home. Teaching is work done to help others learn, which makes it a service.
3. Fix the sentence:
A want is something you need to stay alive like food and water.
Corrected: A need is something you must have to stay alive like food and water.
Things you must have to stay alive, like food and water, are called needs. Wants are extras you can live without, like toys or candy.
Part B: Fill in the Blank
Write the missing word or number on each line.
1. When you set aside money for later, you are saving.
Putting money aside instead of using it now is what saving means. People save so they have money ready for later.
2. A video game is an example of a want because it is not needed to survive.
A video game is fun but no one needs one to stay alive, so it counts as a want. Wants are extras people enjoy but can live without.
3. Work that someone does for another person is called a service.
When one person does work for another, like cutting hair or fixing a leaky pipe, that work is called a service. No object is given, just helpful work.
4. When you use money to buy something, you are spending.
Handing money to a cashier in exchange for something is spending. Spending uses your money up, while saving keeps it for later.
Part C: True or False?
Read each statement. Circle True or False.
1. Shelter is a need because people must have a safe place to live.
True False
True. People must have a safe place to live to stay warm, dry, and protected, which is why shelter is counted as a need.
2. A farmer who sells apples is a consumer.
True False
False. A farmer who grows and sells apples is making and providing the goods, which makes the farmer a producer, not a consumer.
3. Saving money means you can buy something you want in the future.
True False
True. Money you save adds up over time, so later you can use it to pay for something you really want.