Pearl Exchange Activity Full - Demand and Supply

The video tutorial introduces the concept of a free market where buyers and sellers negotiate to reach mutually beneficial agreements. It explains consumer and producer surplus, illustrating how these concepts apply in real-world transactions. The tutorial includes an interactive activity where students practice negotiation skills, simulating market conditions and observing how supply and demand affect prices. Through this exercise, students learn the importance of understanding market dynamics and the role of negotiation in achieving favorable outcomes.

What is the primary goal of buyers and sellers in a free market?

• To increase taxes

• To minimize costs

• To maximize consumer and producer surplus

• To avoid negotiations

How is consumer surplus calculated?

• The total amount spent by the consumer

• The difference between the selling price and the cost price

• The profit made by the seller

• The difference between what a consumer is willing to pay and what they actually pay

In the negotiation example, what was the agreed selling price of the phone?

• $150

• $300

• $175

• $200

What is a key strategy for buyers during negotiations?

• Offer a price higher than the maximum

• Avoid asking questions

• Know the actual worth of the product

• Always accept the first offer

What happens if a buyer and seller do not reach an agreement in the market activity?

• Both take a loss equivalent to their maximum or minimum price

• The buyer pays a penalty

• The transaction is postponed

• The seller pays a penalty

What was the effect of the mysterious virus on the market?

• No effect on the market

• Decreased supply of pearls

• Decreased demand for pearls

• Increased supply of pearls

What is the result of a surplus in the market?

• Demand increases

• Prices increase

• Supply decreases

• Prices decrease

How does competition among buyers affect prices?

• Prices remain stable

• Prices decrease

• Prices increase

• Prices are unaffected

What is the significance of understanding supply and demand in a market?

• To avoid negotiations

• To minimize costs

• To increase taxes

• To predict market trends and make informed decisions

What was the final outcome of the market activity in terms of winners?

• No one won

• The buyers won

• The sellers won

• Both buyers and sellers won