Economics

Economics

Grade 11

Multiple Choice

When demand decreases ,the equilibrium price _______.

• decreases

• shifts up

• falls

• shifts down

Chapter ​6,Section 2: Prices as signals and incentives

​Pages 174-179

​Objectives

•       Analyze how the price system works

•       Interpret how prices provide  information about markets

•       Discuss how prices act as incentives to producers​

​

​Competitive pricing occurs when producers sell products at lower prices to lure customers away from rival producers, while still making a profit.

​Characteristics of Price system in a market economy

Open Ended

Choose two of the characteristics of the price system shown in the chart and explain how each is illustrated through the example of competitive pricing.

​Answer

neutral—producers choose to lower prices, and consumers decide who to buy from;

market-driven— producers, not the government, decide to lower prices.​​

Multiple Choice

To what state are the characteristics of the price system always pushing prices?

• Disequilibrium

• Equilibrium

• Shortage

• Surplus

Open Ended

Task 2:What kinds of choices do consumers and producers make to help determine equilibrium price?

​Answer

​Consumers choose which products to buy and at what prices; producers decide what to offer for sale, the quantity, and what prices to charge

Multiple Choice

Why is the price system an efficient way to allocate resources?

• Resources are allocated inefficiently since prices adjust until the maximum of goods and services are sold.

• Resources are not allocated efficiently since prices adjust until the maximum number of goods and services are sold.

• Resources are allocated efficiently since prices adjust until the minimum number of goods and services are sold.

• Resources are allocated efficiently since prices adjust until the maximum number of goods and services are sold.

​Video on Price mechanism

https://www.youtube.com/watch?v=njTKa-dnJPo​

Open Ended

Task 3: What are the signals that shortage and surplus send to producers?

How do prices motivate producers?

Multiple Choice

How can a producer sell at lower price than the competitor and make a profit?

• By purchasing a large quantity

• By selling less quantity

• By selling a large quantity

• All of these

Open Ended

Give main points of the lesson