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:
Natural resources are things like factories and machines that people build.
Corrected: Natural resources are things from nature like water, trees, and soil.
The corrected sentence is: "Natural resources are things from nature like water, trees, and soil." The error was factual error — factories and machines are capital resources, not natural resources: the original sentence "Natural resources are things like factories and machines that people build." needed to be fixed.
2. Fix the sentence:
Before money was invented, people had no way to get things from each other.
Corrected: Before money was invented, people used barter to trade goods and services with each other.
The corrected sentence is: "Before money was invented, people used barter to trade goods and services with each other." The error was factual error — people used barter to exchange goods before money existed: the original sentence "Before money was invented, people had no way to get things from each other." needed to be fixed.
3. Fix the sentence:
Human resources are raw materials found in the earth like oil and minerals.
Corrected: Human resources are the skills, knowledge, and labor that people provide.
The corrected sentence is: "Human resources are the skills, knowledge, and labor that people provide." The error was factual error — oil and minerals are natural resources, not human resources: the original sentence "Human resources are raw materials found in the earth like oil and minerals." needed to be fixed.
Part B: Fill in the Blank
Write the missing word or number on each line.
1. Tools, machines, and buildings used to produce goods are called capital resources.
Capital resources are human-made tools and equipment -- like factory machines, delivery trucks, and ovens -- that workers use to produce goods more efficiently.
2. Trading goods directly without using money is called barter.
Barter is the direct swap of goods or services without money, like trading a basket of apples for a bag of rice. It was the main way people traded before coins and currency were invented.
3. Water, soil, and timber are examples of natural resources.
Natural resources come directly from the environment without being made by people, so water, soil, and timber all qualify because they exist in nature.
4. Money makes trade easier because it serves as a common medium of exchange.
Money works as a medium of exchange because everyone agrees on its value, so a seller will always accept it instead of needing to find a trading partner with the exact goods they want.
Part C: Short Answer
Answer each question in one or two complete sentences.
1. Name the three types of economic resources and give one example of each.
Sample answer: Natural resources come from nature, like trees. Human resources are people's skills and labor, like a teacher's knowledge. Capital resources are tools and machines, like a computer used in a business.
A good answer includes: Natural resources come from nature, like trees. Human resources are people's skills and labor, like a teacher's knowledge. Capital resources are tools and machines, like a computer used in a business.
2. Why is using money easier than barter for buying things?
Sample answer: Money is easier because everyone agrees on its value. With barter, you have to find someone who wants exactly what you have and has exactly what you want, which can be very difficult.
A good answer includes: Money is easier because everyone agrees on its value. With barter, you have to find someone who wants exactly what you have and has exactly what you want, which can be very difficult.