Economics Basics — Answer Key
Part A: Fill in the Blank
Write the missing word or number on each line.
1. A baker who makes bread to sell at a shop is a producer.
A baker creates loaves of bread for other people to buy, and anyone who makes goods to sell is a producer. Producers turn ingredients or materials into items consumers want.
2. When many people want the same toy, we say there is high demand.
Demand describes how badly people want something. When lots of people want the same toy at the same time, demand is high.
3. If a store has many apples on the shelf, the supply of apples is high.
Supply means how much of something is ready to be bought. A shelf full of apples shows there is a large supply of apples.
4. The person who buys a sandwich at a restaurant is the consumer.
Anyone who pays money to get a good or service is a consumer. Buying a sandwich at a restaurant means using money to receive food, which is what consumers do.
5. A bus ride is an example of a service because no object is taken home.
A bus ride moves you from one place to another, but you do not bring anything home with you. Work that helps people without giving them an object is a service.
6. A new pair of shoes is an example of a good you can touch and keep.
New shoes are physical items you can hold, wear, and keep, so they fit the meaning of a good. Goods are things people buy and take with them.
7. Choosing between two things you want is making a choice.
Picking one option means giving up the other, and that decision is called a choice. People make choices because they cannot always have everything they want.
8. Clean water and food are needs because people cannot live without them.
Clean water and food keep our bodies alive, so they are needs. Needs are different from wants because life depends on them.
9. When you give up one thing to have another, that is an opportunity cost.
Whenever you pick one thing, the thing you did not pick is what you gave up, and that is called the opportunity cost. Every choice has a cost because you cannot have both options.
Part B: Matching
Match each item on the left to the correct answer on the right.
1. Match each item to its correct answer.
A farmer grows corn to sell.
→ Producer
Good
A child buys a book.
→ Consumer
Consumer
A plumber fixes a sink.
→ Service
Service
A shoe on a store shelf.
→ Good
Producer
A farmer who grows corn is making goods to sell, which is the job of a producer. A child buying a book is paying money for an item, which makes them a consumer. A plumber fixing a sink is doing helpful work for someone else, so that is a service. A shoe sitting on a store shelf is a physical item people can buy and take home, which makes it a good.