How Markets Work

Civics & Economics · Economics · ages 11-14

Name ______________________ Date ____________

A big hockey game is coming to town. Suddenly lots more fans want tickets, but the arena has the same number of seats as always. What will probably happen to the ticket price?
- The price goes up
- The price goes down
- The price stays exactly the same
- The tickets become free
When demand for something suddenly jumps but supply stays the same, what usually happens to the price?
- It goes up
- It goes down
- It never changes
What is a union's main job?
- To sell products for the highest possible profit
- To give away free goods to anyone who asks
- To bargain with employers for workers' pay and conditions
In the labour market, what does a worker sell to an employer?
- Their house
- Their work
- Their vote
The job market works like other markets: workers sell their work and employers buy it. In this market, what plays the role of the price?
- The wage
- The job title
- The company logo
- The size of the office
A group collects donations to give free meals to families in need. Which kind of institution is this?
- A firm, since it sells meals for profit
- A charity, since it serves a mission rather than seeking profit
- A union, since it bargains for worker pay
Look at the graph. Before the storm, umbrellas cost $5 each. How many dollars did the price go up after the storm?
Answer: ______________
A bakery finds that every time it cuts the price of a muffin by $1, it sells 10 more muffins a day. The bakery cuts the price from $3 to $1. How many more muffins a day will it sell?
Answer: ______________
Zoe says, 'Prices only go up because sellers are greedy.' What is missing from her explanation?
- Sellers' feelings are the only reason prices ever change
- Prices never change unless the government sets a new one
- Prices often rise because demand grew faster than supply, not just because of seller attitudes
A union leader says, 'Since we act like a business, our top goal should be to maximize profit for our owners.' What is wrong with this statement?
- A union's job is to bargain for its worker-members, not to maximize profit for owners
- Unions never talk to employers about pay
- Nothing is wrong; all institutions want profit above all else

Answer key

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

How Markets Work W1-mt_IWiQW8Sq2R-s1

The price goes up · When more people want something and the amount for sale does not change, sellers can charge more. That is demand pushing the price up.
It goes up · More buyers chasing the same amount of goods pushes the price up.
To bargain with employers for workers' pay and conditions · A union represents its worker-members and negotiates on their behalf.
Their work · Employers buy work from workers, and the wage is the price for that work.
The wage · In a market, the price is what the buyer pays the seller. In the labour market, employers pay workers a wage for their work, so the wage is the price.
A charity, since it serves a mission rather than seeking profit · Charities exist to serve a mission, like feeding people, not to earn profit for owners.
7 · The price rose from $5 to $12, a $7 increase, because demand for umbrellas jumped while supply stayed the same.
20 · The price dropped by $2, and each $1 drop adds 10 sales, so the bakery sells 20 more muffins.
Prices often rise because demand grew faster than supply, not just because of seller attitudes · Supply and demand, not just seller attitude, usually explain price changes.
A union's job is to bargain for its worker-members, not to maximize profit for owners · A union's purpose is to represent workers, not to act as a profit-seeking firm.