Economics: Supply & Demand — Answer Key
Part A: Fill in the Blank
Write the missing word or number on each line.
1. When countries rely on each other for goods and services, it is called economic interdependence.
Economic interdependence means countries depend on one another -- for example, one country may grow coffee while another builds electronics, and both trade to get what they lack.
2. Forests, rivers, and minerals are all examples of natural resources.
Forests, rivers, and minerals all come from the Earth without human manufacturing, which makes them natural resources that people harvest or extract for use.
3. In a command economy, the government makes most of the decisions about what to produce.
In a command economy, the government controls production decisions rather than individual businesses, deciding what goods to make, how many, and what prices to charge.
4. In a market economy, supply and demand help decide what goods are produced.
In a market economy, supply and demand work together like a balancing act -- businesses produce goods people want to buy, and prices adjust based on how much is available versus how much people want.
5. Workers, teachers, and doctors are all considered human resources.
Human resources are the people whose skills, knowledge, and labor make production possible -- a teacher's expertise and a doctor's training are both valuable human resources.
6. A mixed economy combines features of both market and command systems.
A mixed economy blends free-market business decisions with government oversight, so private companies compete freely while the government still regulates safety, education, and public services.
7. Resources that can be replaced over time, like trees and fish, are called renewable.
Renewable resources like trees and fish can regrow or reproduce naturally over time, so they will not run out as long as people do not use them faster than nature can replace them.
8. Oil and coal are nonrenewable resources because they take millions of years to form.
Oil and coal formed from ancient plants and animals buried underground for millions of years, so once we use them up, they cannot be replaced in any human lifetime.
9. The United States has a mixed economy because both businesses and the government play a role.
The United States is a mixed economy because private businesses set most prices and make products freely, but the government steps in with regulations, taxes, and public services like highways and schools.
Part B: Matching
Match each item on the left to the correct answer on the right.
1. Match each item to its correct answer.
Natural resource
→ water from a river
countries relying on each other
Human resource
→ a teacher in a classroom
a tractor used on a farm
Capital resource
→ a tractor used on a farm
a teacher in a classroom
Interdependence
→ countries relying on each other
water from a river
Correct matches: Natural resource → water from a river; Human resource → a teacher in a classroom; Capital resource → a tractor used on a farm; Interdependence → countries relying on each other.