AnswersEA Academy Civics 9Supply, Demand, and Price

Supply, Demand, and Price Answers

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1
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This year’s peanut crop is badly damaged by extreme heat and lack of rain. As a result, there is a shortage of peanuts to make peanut butter. The short supply causes grocery stores to raise prices on peanut butter. This results in lower jelly sales.

A
Jelly is in competition with peanut butter.
B
Jelly is a substitution for peanut butter.
C
Jelly and peanut butter are equilibrium goods.
D
Jelly and peanut butter are complementary goods.
2
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Review the table.

Question illustration
A
how supply affects how many producers provide goods
B
how supply affects how many goods consumers will buy
C
how price affects how many goods consumers will buy
D
how price affects how many goods producers will provide
3

Review the table.

Question illustration
A
how supply affects the price producers will charge for goods
B
how supply affects the number of goods consumers will buy
C
how price affects how many goods consumers will buy
D
how price affects how many goods producers will provide
4

What does the law of demand state?

A
Suppliers will meet demand with more quantity when prices are higher than when prices are lower.
B
Consumers will demand a lower quantity at higher prices and a higher quantity at lower prices.
C
Consumers will substitute one good or service with a similar one when prices are too high.
D
Suppliers will meet demand with lower prices when faced with too much competition in the market.
5

What happens when supply is greater than demand?

A
Prices rise until equilibrium is reached.
B
Prices fall until equilibrium is reached.
C
Demand rises to meet the supply.
D
Supply falls to meet demand.
6

The US economy hits a rough patch. Unemployment is high, and many people worry about losing their jobs. How will these factors most likely affect the demand for many goods and services?

A
Demand will not change.
B
Demand will increase.
C
Demand will decrease.
D
Demand will disappear.
7

Company A is the first business to produce a computer battery that lasts three times as long as existing batteries. As demand for the battery grows, the company raises prices and increases production. The following year, Company B markets a battery that lasts almost as long but costs only half as much. Company A is forced to lower its price. In response, the company produces less of its battery.

A
the law of demand
B
factors of production
C
the law of supply
D
substituted goods
8

Review the graph.

Question illustration
A
the substitution price
B
the equilibrium price
C
the competition price
D
the complementary price
9

Which scenario best illustrates the fact that the demand for some products is seasonal?

A
The Vega family is planning to open an ice cream shop. They know that ice cream will be most popular during the warmer months of the year. To increase demand during the colder months, they plan to sell hot chocolate, specialty coffee drinks, and pastries.
B
A car company is planning to market a small number of very expensive cars. The cars will look like luxury cars from the past, but they will have the latest modern technology. The company realizes that the cars will appeal to only a limited number of consumers.
C
A store has a large supply of sneakers that were popular last year. Since then, the celebrity athlete who endorsed the sneakers has been dropped from his team and has not been picked up by another team. Demand for the sneakers has dropped dramatically.
D
A handheld slide projector was once a very popular toy. A child clicked the side switch to view each picture. Today, children can view many more images on phones. Although the slide projector toy is still available, its popularity has declined.
10

Which scenario best illustrates the law of supply?

A
Nam wants to buy a video game. He is willing to pay $60 for a new video game if the game is very exciting. However, he is not willing to pay more than that amount. If he can find exciting used video games for $30, he is willing to buy two games.
B
Diya is making beaded bracelets to sell online. To make a profit and pay for her time, she must charge at least $10 per bracelet and make at least 10 bracelets. She is willing to spend more time making a larger number of bracelets if she can charge more per bracelet.
C
A store has 75 summer-themed T-shirts that did not sell, and now the weather is turning cold. Rather than keep the T-shirts until next summer, the store decides to lower the price from $20 to $15. After only some of the T-shirts sell, the store holds a “buy 1, get 2” sale.
D
A shortage of microchips has forced an automobile manufacturer to change features in its cars and trucks. Rather than stopping production until more microchips are available, the company is making and selling some of its vehicles without fuel-saving features that require microchips.

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