Economics Basics — Answer Key
Part A: Multiple Choice
Circle the best answer for each question.
1. A town has many apple trees this year so stores are full of apples. What will most likely happen to the price of apples?
A) The price will go up.
B) The price will go down.
C) The price will double.
D) Apples will disappear.
When there is too much supply of a product but demand stays the same, the price decreases.
2. Which sentence best describes a consumer?
A) A person who makes clothes in a factory.
B) A person who buys a shirt at a store.
C) A person who delivers packages to homes.
D) A person who grows wheat on a farm.
A consumer is someone who buys or uses goods and services, like a person buying a shirt at a store.
3. Jake earns five dollars for doing chores. He spends three dollars on candy. How much does he save?
A) Five dollars.
B) Three dollars.
C) Two dollars.
D) Zero dollars.
If you pay $5 for a $3 toy, you get $5 minus $3, which equals $2 in change.
4. Which pair are both needs rather than wants?
A) A tablet and a video game.
B) Food and shelter.
C) A skateboard and ice cream.
D) A comic book and a toy car.
Food and shelter are basic needs that every person must have to survive.
Part B: Fill in the Blank
Write the correct answer on each line.
1. When there are more items than people want, the supply is high.
Supply is the total amount of a product that is available for consumers to purchase.
2. A mechanic who fixes cars is providing a service.
A dentist cleaning your teeth is a service because it is work done for you, not a physical item.
3. If you choose a cookie over a cupcake, the cupcake is your opportunity cost.
Cost is the price or amount of money required to buy a good or service.
4. People earn money so they can pay for things they need or want.
When you work at a job, you earn money as payment for your work.
5. A store that sells many kinds of goods to families is meeting consumer demand.
Demand is the desire and willingness of consumers to purchase a product.