Economics: Supply & Demand — Answer Key
Part A: Fix the Sentence
Each sentence has an error. Rewrite it correctly on the line.
1. Fix the sentence:
A video game is an example of a need because everyone plays them.
Corrected: A video game is an example of a want because it is not needed for survival.
The corrected sentence is: "A video game is an example of a want because it is not needed for survival.". The original sentence "A video game is an example of a need because everyone plays them." contained an error that needed to be fixed.
2. Fix the sentence:
Scarcity means there are unlimited resources for everyone.
Corrected: Scarcity means there are limited resources for everyone.
The corrected sentence is: "Scarcity means there are limited resources for everyone.". The original sentence "Scarcity means there are unlimited resources for everyone." contained an error that needed to be fixed.
3. Fix the sentence:
A haircut is a good because you can hold it in your hand.
Corrected: A haircut is a service because it is work done for someone.
The corrected sentence is: "A haircut is a service because it is work done for someone.". The original sentence "A haircut is a good because you can hold it in your hand." contained an error that needed to be fixed.
Part B: Fill in the Blank
Write the missing word or number on each line.
1. Food, water, and shelter are all examples of basic needs.
Needs are things necessary for survival: food, water, shelter, clothing.
2. Physical products like clothing and toys are called goods.
Goods are tangible products you can touch and buy, like food, clothing, and tools.
3. When resources are limited, we call that problem scarcity.
Scarcity means there are not enough resources to satisfy everyone's wants and needs.
4. Work performed for others, such as teaching or delivery, is called a service.
Services are intangible work done for someone — haircuts, teaching, repairs, transportation.
Part C: Short Answer
Answer each question in one or two complete sentences.
1. What is the difference between a need and a want? Give one example of each.
Sample answer: A need is something essential for survival, like food or shelter. A want is something you desire but do not need to live, like a video game or a new bicycle.
Needs = survival essentials. Wants = things that improve quality of life but aren't required to survive.
2. Why does scarcity force people to make choices?
Sample answer: Scarcity means there are not enough resources for everyone to have everything they want, so people must decide what is most important and choose how to use their limited resources.
Limited resources + unlimited wants = the economic problem of scarcity. Choices and trade-offs result.