12 Questions
What is the relationship described in the scenario?
Increase in demand, decrease in supply
How might the scenario impact the price of the shoes?
Increase in demand, increase in price
In a free market economy, which factor primarily determines the availability of goods like Bounce Shoes?
Consumer preferences
What economic concept is illustrated by Julia's cost of making necklaces versus the selling price?
Profit margin
Based on the budget scenario for the hamster's party, which category aligns with the concept of 'saving for future use'?
Savings
If Eric decides to wait for the new shipment of Bounce Shoes, what economic principle is he demonstrating?
Scarcity
What did Henry Ford do to sell more cars at a lower price?
Using an assembly line
Why are all 24 kids in Mr. Hall's class unable to color with markers?
There are only 3 markers available
What strategy would help Ms. Marcel's class sell more cupcakes at the bake sale?
Lower the price
What is a common outcome of scarcity in economics?
Rising prices due to limited supply
How does budgeting help individuals or families manage their finances?
By prioritizing financial goals
Why was Eric eagerly anticipating the arrival of the new basketball shoes at the store?
For his upcoming basketball game
Study Notes
Supply and Demand
- Eric wants to buy a new pair of Bounce Shoes, but the store has sold out and will not receive a new shipment for two weeks, illustrating a decrease in supply and an increase in demand.
- This scenario may lead to an increase in price due to the high demand and limited supply.
Free Market
- The scenario above describes a free market in the free enterprise system, where the supply and demand of a product determine its price.
- The store's apology and notification of a new shipment in two weeks reflect the interactions between producers and consumers in a free market.
Production and Profit
- Julia's store sells necklaces, rings, and earrings, and she makes a profit of $2.50 per necklace by selling them for $3.00 while only costing 50 cents to make.
- If Julia uses beads that cost $1.00 in her necklaces, her profit might decrease, as her costs would increase.
Budgeting
- To celebrate a pet hamster's birthday, a budget is created from a $15 piggy bank and a $5 allowance from helping with chores.
- The budget allocates funds for decorations, food, a gift, savings, and a donation to a local pet shelter.
Scarcity
- The scenario with 24 kids wanting to color with only 3 markers illustrates the concept of scarcity, where the demand for a resource exceeds its availability.
Mass Production
- Henry Ford sold more cars at a lower price by using an assembly line, which increased efficiency and reduced production costs.
Pricing Strategies
- If Ms. Marcel's class wants to sell more cupcakes at a bake sale, they should consider lowering the price, making more cupcakes, or using alternative strategies.
Budgeting and Financial Planning
- Tamika's parents create a budget to allocate their money for different purposes, including earning, saving, spending, and donating.
- The budget includes items like setting aside money for a vacation, contributing to a charity, and paying bills.
Test your knowledge of supply and demand with scenarios like a scarcity of markers in a classroom and low sales at a bake sale. Answer questions related to pricing strategies, market behavior, and production techniques.
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