The Market Economy

Drag and Drop

Private Property

​

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something gives you the right to ​

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and ​

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it. Profit ​ would be ​

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without the right to own property. ("Property" here means both tangible ​

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and land.)

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Owning

Buy

Sell

not possible

goods

Incentives/Self-Interest

Use the reading on pages 79 -
80 to complete the blanks on
the right. Questions, page 81

1

2

3

4

5

Word Bank

Buyers
Desire
Needs
Profit
Wants

Dropdown

Incentives/Self-Interest

People's own ​ ​

Select answer

motivates them to produce, in the hope of making a ​

Select answer

. Self-interest is also an incentive for ​

Select answer

, who seek to fulfill their ​

Select answer

and ​

Select answer

at the best price possible.

Drag and Drop

Markets and Prices

Buyers and sellers freely ​

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goods and services on the ​

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. The market forces of ​

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and ​

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determine what ​

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will be.

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exchange

open market

supply

demand

prices

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Freedom of Choice

People are free to ​

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what to ​

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and ​

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. The choices producers and consumers make determine what ​

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and ​

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are available

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choose

buy

sell

goods

services

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Competition

Producers ​

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with each other for ​

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by trying to produce goods and services that will be most ​

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to consumers. This leads to innovation (​

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) and better (​

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.

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compete

profit

desirable

better

deals

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Limited Government Role

The ​

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does not make rules about ​

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and ​

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gets produced. The government's main role is to make sure the market is ​

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and producers have a chance to ​ __

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.

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government

selling

what

open

compete

For each of the following situations, identify what term best shows the situation. Use page 43 as a word bank.

Multiple Choice

Maria goes to the store and buys a new backpack shows:

• Consumer

• Competition

• Scarcity

Multiple Choice

Tyler mows lawns and does yard work for $10 per hour. This shows

• Supply and Demand

• Consumer

• Producer

Multiple Choice

Gas Station A sells gas for $3.75/gallon. Across the street, Gas Station B sells it for $3.74. Gas Station A lowers its price to $3.74. This shows

• Supply and Demand

• Competition

• Scarcity

Multiple Choice

A car company made thousands and thousands of cars this year, but people haven't been buying as many cars. The car dealer lots are full. This shows

• Competition

• Scarcity

• Supply and Demand

Multiple Choice

Liam spends $10 on lemonade mix and ice. On a hot day, he sets up a lemonade stand in his yard. At the end of the day, he has sold $20 worth of lemonade. This shows

• Producer

• Scarcity

• Profit

Multiple Choice

Erin could make $24 this afternoon babysitting, or she could attend her grandma's birthday party. She decides to attend the party. She doesn't get the money, but her grandma is thrilled. This shows

• Opportunity Cost

• Scarcity

• Supply and Demand

Multiple Choice

It's holiday time, and the hottest toy of the year sells out. People are paying ten times what it's worth online. This shows

• Supply and Demand

• Scarcity

• Producer

For each of the following situations, consider if there is an incentive for the action - it's a smart move. Or, if there is a disincentive for the action - it's not a smart move.

Multiple Choice

Jason is thinking of getting some raspberries, but they're out of season and cost $6 for a tiny box.​ ​ ​ ​

​ ​ ​​

• Disincentive to buy

• Incentive to buy

Multiple Choice

Acme, Inc. is thinking of making touch-screen computers. It can make computers for $500 each and sell them for $2,000 each. ​ ​

​ ​ ​​

• Disincentive to produce

• Incentive to produce

Multiple Choice

Beta, Inc. is thinking of making cars that run on water. It will cost $100,000 to make one car, but people won't pay more than $40,000 to buy one.

​ ​ ​​

• Disincentive to produce

• Incentive to produce

Multiple Choice

Ann's house needs a new roof. She is thinking of doing the project this weekend with the help of her family. Roof shingles just went on sale for half price.

​ ​ ​​

• Disincentive to produce

• Incentive to produce

Multiple Choice

Dr. Smith is thinking of opening a dentist office in Centerville. Right now the nearest dentist is in the next town, 40 miles away.

​ ​ ​​

• Disincentive to produce

• Incentive to produce

Open Ended

Sam’s boss called to offer her an extra shift tonight.  Sam wanted the money, but she’s got a big swim meet tomorrow and needed sleep.  She told her boss to offer the shift to someone else.  

The opportunity cost was:

Open Ended

3. Jason can put his money in a savings account and earn about 12 cents in interest this month, or he can loan it to Matt, who says he’ll return the money plus $20 at the end of the month.  He loans it to Matt.

The opportunity cost was:

Open Ended

3. Lacey designs dresses.  She can keep designing casual dresses that bring $65 but are easy to sell, or she could design formal gowns that sell for $500 but must be high fashion.  She takes a risk on formal gowns.

The opportunity cost was:

Open Ended

4. If Zephyr, Inc. spends $2 million buying out its main competitor, it can earn $3 million in new sales.  If it spends $2 million designing a new airship, it might make $4 million if it can sell 10 ships.  It buys the competitor.

The opportunity cost was: