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The Market Economy
Mame:
Review. Real each scenaria. Match each label with the example that illustrates it.
9
4
5
B, Motivated? For eath exarple, circle ah iF
the person or businesshas an incentive to act and
circle “7? if theydon't.
1. son is thinking af getting some raepberries, but
+they/re out of season and cast $6 for a tiny box,
— ab
2. deme, Ine, i thinking oF making touchscreen
computers. It can make computers far $500 each
and Sell them for $2,000 each.
oF
3, Beta, Inc. is thinking af making cars. that run on
‘water, It will cost $100,000 ta make one car, but
people won't pay mare than $40,000 to buy re.
at
4. Aaw’s house needs 4 new roef. She is thinking of
doing the project this weekend, and roof shingles
st ent on Sale far al price ag
S. Dr. Saith i thinking of opening a dentist office in
Cenibervige. Right now the nearest dentist is in
the next town, 40 miles away. mh
1) Marla gues to the store and buys a new backpack,
2) Tyler mows lawns and does yard work for $10 per hour.
Gas Station A sells gas for $3.75/gallon, Across the street,
Gas Station B selis it for $3.74. Gas Station A lowers its price
to $4.74,
Liam spends $10 on lemonade mix and ice. On a hot day, he sets
up a lemonade stand in his yard. AL the end of the day, ne has
sald $20 worth of lemonade,
‘Acar company made thousands and thousands of cars this year,
but peuple haven't been buying as many cars. The car dealer
lots are Full,
6) Erin coud make $24 this afternoon babysit ting, or she could
attend her grandma's birthday party. She decides to attend
‘the party Se doesn't get the money, but her grandma is
thrilled,
7) It's holiday time, and the hottest toy of the year sells out,
People are paying ten times what it’s worth online,
( ACicular Flow. There is a circular Aow of
interaction between consumers and praducers in
the market,
in the circle to showwhich waythe thing described
‘on that lingis Rowing, D. What's the Opportuniy Cost? For each situation, write the opportunity cast—what the person
gave up bymaking the decision, (Hint: Don’t worry about math, Describe the cost in words.)
oy hard decision
14 Cline or sein? 2} An Seteresting Choice 3 Rey Bu eas 2
Sats bens cated 10H ememcan pt MOREY ry deg dresses Soe TEE TT in
per aextro ste ORE ig amen EM a eee devaming cama | MIR pear 33
Son wanted the momey. | cemes n nterest. | ER chat brag MAS tat come
sales it
q Md milan in new sles. 1
ssrve's got a big set meet ‘gals month, or he CHV ARIE eeu to seh oF she Cl . ition designe
tomorrow and needed SFA oo myct, who says He rcp formal ours that. 0 ee aeet
Sete bss tN ey a mney BA BAD oy gk mat | a 1D ti
ithe sit te somone est: Taree ee Srhas the competitor
leas eto Mo formal
he Pe gperneitycot | ee ggarnysty cost ©The apport emt
E. Three Kinds of Economies, You already naw about market and command economies. & traditional
economy existsin primitive cultures where most activityis Focused on proniding food. People follow the
methods and traditions their ancestors have alvways used. Think about this, and read the statements below.
‘Organize them into the comparison chart by writing the letter of each st tement where it should ge.
‘What type of economy does
‘the United States have?
O mare:
‘OConnand
Q Trarttional
“This type of economy is ata
ald a
Ecoremy
A. The government decides what should be produced. (G. Producers decide what to make based on consumer
B, The need to survive motivates people to hunt, denen.
gather, or farm He Private individuals own the property.
C. Producers don't compete because e ‘works L. The conmunity’s eustons and traditions determine
to meet the Community's Survival what & produced
D. The government. sets wages, so peuple aren't J. Must property is shared by the community.
motivated by profit. K. The hope of profit motivates producers to develop
E. Producers compete with each other to make profits new things.
: from astomers. L. There is nu competition because the guverniment is
The government owné the property, the only producer.
