Supply & Demand Assessment

Complete the chart by sorting the examples below into goods or services.

Groups:

(a) GOODS

,

(b) SERVICES

• getting a manicure

• nail polish

• sunglasses

• a pickup truck

• getting an eye exam

• changing a car's oil

What does the law of supply and demand say?

• Consumers are unable to affect market prices because the prices are set by producers.

• Taxes should be determined by the amount of a product that consumers want to purchase.

• Producers affect the tax rates by setting prices for their products and consumers affect them by deciding what to purchase.

• Prices are determined by the quantity of a product producers want to sell in relation to the quantity consumers want to purchase.

A company printed thousands more t-shirts than consumers want to buy.

What will happen to the price?

• Rise

• Fall

• Stay the same

Many people want to buy a new video game, but there are only a few for sale.

What will happen to the price?

• Rise

• Fall

• Stay the same

An early frost destroyed orange groves, dramatically reducing the number of oranges available for purchase.

What will happen to the price?

• Rise

• Fall

• Stay the same

A technology company accurately estimated the upcoming demand for their most popular computer.

What will happen to the price?

• Rise

• Fall

• Stay the same

Travel restrictions caused far fewer people than expected to purchase gas over the summer.

What will happen to the price?

• Rise

• Fall

• Stay the same

Match each cause on the left with its MOST likely effect.

• workers are paid more

• a company wants to make more profit without raising prices

• prices decrease

• a seller has many items that consumers are uninterested in buying

• products cost less

• buyers can easily purchase the same items from many different sellers

• workers are paid less

• a seller has a limited supply of items that many people want

• prices increase

• customers refuse to buy from companies that underpay their employees

Which of these is an example of a shortage?

• Farmers produce more corn that consumers want or need.

• Grocery stores have enough bottled water to meet demand.

• Overfishing makes it difficult to catch a popular type of fish.

• A builder has the right amount of lumber to construct a house.

When is there a surplus?

• when there is more supply than demand

• when there is more demand than supply

• when consumer demand is equal to companies’ supply

• when companies limit supply to increase consumer demand