How the economy works · seed 1 · A4, ink-friendly. The answer key prints on its own page for grown-ups.
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How the economy works

Life Skills · Money & Finance · ages 9-11
Name ______________________   Date ____________

  1. A shop offers 5 scooters. At its posted price, 12 customers are willing and able to buy one each. How many more scooters are needed to meet all 12 requests?

    Answer: ______________

  2. A delayed delivery means a stall can offer only 4 baskets instead of 12 at the same price. Buyers' plans have not changed. What changed?

    • The amount buyers want rose from 4 to 12 baskets
    • The amount offered rose from 4 to 12 baskets
    • The amount offered fell from 12 to 4 baskets
    • The amount buyers want fell from 12 to 4 baskets

  3. Who is producing a good in this trade?

    • A shopper buying corn to cook
    • A farmer growing corn to sell
    • A family buying bread for lunch

  4. Supply describes how much buyers are willing and able to buy at different prices.

    Circle one:   True   False

  5. A bakery can now offer 12 loaves instead of 6 at the same price. Buyers' demand has not changed. What pressure does the larger supply put on price?

    • Pressure to raise prices because fewer loaves are offered
    • Pressure to lower prices because more loaves are offered
    • Pressure to raise prices because buyers' demand increased

  6. At $5 per pie, sellers offer 8 pies and buyers want and can buy 8 pies in total. What does this show at that price?

    • There must be unwanted pies left over at $5
    • Every seller must always charge $5 for a pie
    • Every buyer must pay $5 for all eight pies together
    • The offered and wanted amounts match at $5

  7. At $4 per basket, a farmer offers 10 baskets. Fourteen buyers are willing and able to buy one each. What is the situation at that price?

    • A shortage: more baskets are wanted than offered
    • A surplus: more baskets are offered than buyers want
    • A balance: ten baskets can meet all fourteen requests
    • A surplus: the four missing baskets count as unsold stock

  8. More people want and can buy ice cream at each price. Supply has not increased. What pressure does this put on price?

    • Pressure to lower prices until cones are free
    • Pressure to remove every cone from sale
    • Pressure to raise prices as buyers compete

  9. Jay says, 'A farmer buys bread for lunch, so the farmer cannot also be a producer of food.' What does Jay miss?

    • Buying lunch stops a farmer from producing food
    • Selling food stops a farmer from ever buying lunch
    • A farmer can have both roles in different trades

  10. A shop still has many winter coats. In summer, fewer people want and can buy them at each price. What might the shop do?

    • Lower prices to attract more coat buyers
    • Raise prices because coat demand has increased
    • Treat the coats as sold even though nobody buys them
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Answer key

For grown-ups. Fold this page away before handing over the rest.

How the economy works W1-mt_udgPy5oAvR-s1

  1. 7 · 12 scooters are wanted and 5 are offered. The missing amount is 12 - 5 = 7.
  2. The amount offered fell from 12 to 4 baskets · The seller offers fewer baskets at the same price. The change is on the supply side.
  3. A farmer growing corn to sell · Growing corn to sell produces a good. The other people are buying goods to use.
  4. False · This describes demand. Supply describes how much sellers are willing and able to offer at different prices.
  5. Pressure to lower prices because more loaves are offered · A larger supply with unchanged demand puts downward pressure on price.
  6. The offered and wanted amounts match at $5 · Eight pies offered equals eight pies wanted at $5. The amounts balance at that price.
  7. A shortage: more baskets are wanted than offered · Fourteen baskets are wanted but only ten are offered at $4. This is a shortage.
  8. Pressure to raise prices as buyers compete · Higher demand with unchanged supply puts upward pressure on price. A seller may still keep its posted price.
  9. A farmer can have both roles in different trades · The farmer consumes bread in one trade and produces food for sale in another.
  10. Lower prices to attract more coat buyers · Lower demand can lead a seller to cut prices to attract buyers.
Worksheet · LightMySky