Economics Basics — Answer Key
Part A: Fix the Sentence
Each sentence has an error. Rewrite it correctly on the line.
1. Fix the sentence:
A new backpack is a service because you carry it to school.
Corrected: A new backpack is a good because it is an item you can touch and keep.
A backpack is a solid object you can pick up and own, which fits the meaning of a good. Services are actions people perform, not things you can hold.
2. Fix the sentence:
A producer is the person who buys things at a shop.
Corrected: A consumer is the person who buys things at a shop.
Producers make goods, while consumers purchase and use them. The person doing the buying is a consumer, not a producer.
3. Fix the sentence:
A trip to the movie theater is a good because you enjoy it.
Corrected: A trip to the movie theater is a service because someone provides entertainment for you.
You don't take a movie home — the theater workers show the film for you, which is work they perform. That makes the movie trip a service rather than a good.
Part B: Fill in the Blank
Write the missing word or number on each line.
1. A stuffed animal is something you would like but do not need, so it is a want.
Wants are extras people enjoy but can live without. A stuffed animal is fun to own but it isn't necessary for survival, so it counts as a want.
2. Medicine and clean water are needs because people cannot stay healthy without them.
Needs are things people must have to stay alive and healthy. Since nobody can live without clean water or medicine when sick, these are classic examples of needs.
3. A mail carrier who delivers letters to your home provides a service.
The mail carrier does the work of bringing letters to your door — an action done for you. Helpful actions people perform are called services.
4. When a family buys food at the grocery store, the family members are consumers.
Consumers are the people who buy goods and services. A family paying for groceries is using their money to purchase food, so they are acting as consumers.
Part C: True or False?
Read each statement. Circle True or False.
1. A toy robot is a need because children enjoy playing with it.
True False
False — enjoying something doesn't make it a need. A toy robot is fun but not required for survival, so it's a want.
2. A person who bakes cookies to sell at a fair is a producer.
True False
True — a producer is anyone who makes goods for others to buy. Baking cookies to sell is creating a product, which is exactly what producers do.
3. Clothing is a need because it keeps people warm and safe.
True False
True — people depend on clothes for warmth and protection from the weather. Like food and shelter, clothing is a basic human need.