Understanding 6th Grade Economy

What is the law of supply and demand?

• The law of supply and demand is a theory that prices are fixed regardless of market conditions.

• The law of supply and demand is the principle that prices are determined by the relationship between supply and demand.

• The law of supply and demand dictates that demand is always higher than supply.

• The law of supply and demand states that supply always exceeds demand.

How does an increase in demand affect prices?

• An increase in demand leads to lower prices.

• An increase in demand has no effect on prices.

• An increase in demand causes prices to stabilize.

• An increase in demand generally causes prices to rise.

What are the three main types of economic resources?

• Resources, Assets, Products

• Wealth, Trade, Investment

• Land, Labor, Capital

• Goods, Services, Money

Define renewable resources and give an example.

• Natural gas

• Coal

• Solar energy

• Nuclear energy

What is the difference between goods and services?

• Goods are intangible; services are tangible.

• Goods are tangible items; services are intangible activities.

• Goods are services that can be returned; services cannot.

• Goods are always free; services require payment.

What are the four factors of production?

• Finance, Resources, Labor, Production

• Water, Technology, Management, Marketing

• Land, Labor, Capital, Entrepreneurship

• Raw Materials, Services, Trade, Innovation

How do consumers influence supply?

• Consumers influence supply by affecting demand, leading suppliers to adjust production levels.

• Consumers directly set prices for goods.

• Suppliers determine production levels without consumer input.

• Consumers have no impact on market trends.

What is a market economy?

• A market economy relies solely on government regulations.

• A market economy is based on barter and trade without currency.

• A market economy is an economic system driven by supply and demand with minimal government intervention.

• A market economy is controlled entirely by the government.

What is a command economy?

• A market economy with minimal government intervention.

• A system where private businesses control all economic activities.

• An economic system where supply and demand dictate production.

• A command economy is an economic system where the government controls all aspects of the economy.

What role does currency play in trade?

• Currency acts as a medium of exchange, simplifying transactions and enabling trade.

• Currency is primarily a tool for investment.

• Currency is only used for saving money.

• Currency has no impact on international trade.