Market Economy for 3rd Graders: Learn the Basics of Supply and Demand

Question 1

What happens when there are more apples available in the market than people want to buy?

Accepted Answer

The price of apples will likely go down.

Answer

The price of apples will likely go up.

Answer

The number of apples sold will likely go down.

Question 2

When people who make things try to sell them to each other for the best price, what is that called?

Accepted Answer

Competition

Answer

Government control

Answer

Special rights

Answer

Working together

Question 3

What is a good thing about buying and selling things freely without much government control?

Accepted Answer

People get to choose more things

Answer

The government decides everything

Answer

People don't have enough choices

Answer

It's not fair

Question 4

What is the difference between something you really need, like food, and something you would just like to have, like a toy?

Accepted Answer

You have to have what you need, but you can wait for what you want

Answer

You can only have a few things you need, but you can have as many things as you want

Answer

Both needs and wants are important for your happiness

Answer

There is no difference between needs and wants

Question 5

What happens when demand is greater than supply?

Accepted Answer

Prices increase

Answer

Prices decrease

Answer

Prices stay the same

Answer

The government intervenes

Question 6

What is the purpose of a price ceiling?

Accepted Answer

To set a maximum price for a product

Answer

To set a minimum price for a product

Answer

To prevent competition

Answer

To control inflation

Question 7

Which of the following is NOT a characteristic of a market economy?

Accepted Answer

Government control

Answer

Private property

Answer

Profit motive

Answer

Consumer sovereignty

Question 8

What is the difference between a monopoly and a competitive market?

Accepted Answer

In a monopoly, one seller controls the entire market, while in a competitive market, there are many sellers.

Answer

In a competitive market, prices are lower than in a monopoly.

Answer

Monopolies are more efficient than competitive markets.

Answer

There is no difference between a monopoly and a competitive market.

Question 9

In a competitive market, which of these is true?

Accepted Answer

Customers have many options to choose from.

Answer

There are only a few companies selling products.

Answer

Companies can choose any price they want.

Question 10

What is the main job of prices in a market economy?

Accepted Answer

Both of the above

Answer

To tell buyers what to buy.

Answer

To tell companies how much to sell.

Question 11

If people stop wanting a product, what will happen to its price?

Accepted Answer

The price of the product will decrease.

Answer

The supply of the product will also go down.

Answer

The price of the product will increase.

Question 12

What is the main goal of a business in a market economy?

Accepted Answer

To make as much money as possible.

Answer

To help people.

Answer

To protect the environment.

Question 13

When there are many toys in a store, what usually happens to the price of the toys?

Accepted Answer

The price goes down.

Answer

The price goes up.

Answer

The price stays the same.

Question 14

If the price of a product goes up, what usually happens to the amount of that product that businesses are willing to sell?

Accepted Answer

It goes up

Answer

It goes down

Answer

It stays the same

Answer

It becomes zero

Question 15

Which of these things does NOT affect how much people want of a product?

Accepted Answer

The weather

Answer

How much they like it

Answer

How much it costs

Answer

How much money they have

Question 16

What is the main reason why businesses compete in a market economy?

Accepted Answer

To offer more choices and better products

Answer

To make sure prices are high

Answer

To get rid of all the other businesses

Answer

To lower production costs

Question 17

Which of these countries is an example of a market economy?

Accepted Answer

The United States

Answer

North Korea

Answer

Cuba

Answer

Venezuela

Question 18

Which of these is a feature of a free market economy?

Accepted Answer

People can own their own businesses

Answer

Government controls prices

Answer

The government decides what gets produced

Answer

There is no competition

Question 19

When there is high demand for a product, meaning many people want to buy it, and low supply, meaning there is not much of it available, what will most likely happen to the price of the product?

Accepted Answer

The price will go up.

Answer

The price will go down.

Answer

The price will stay the same.

Question 20

What is one of the main roles of prices in a market economy?

Accepted Answer

To show the value of goods and services

Answer

To prevent people from buying too much

Answer

To ensure that everyone has access to the same goods

Answer

To make money for the government

Question 21

How does the government mainly regulate the market economy?

Accepted Answer

By creating laws and rules

Answer

By giving money to businesses

Answer

By owning and running businesses

Answer

By controlling all prices and wages

Question 22

Which factor is most important in determining the price of a product?

Accepted Answer

How much people want the product

Answer

The cost of making the product

Answer

How much of the product is available

Answer

Government regulations

Question 23

In a market economy, what is a major advantage for people?

Accepted Answer

People can buy and sell things as they choose.

Answer

The government controls what jobs people can have.

Answer

The government sets the prices of all goods and services.

Answer

All businesses are owned by the government.

Question 24

When there are more buyers than products available, what will happen to the price?

Accepted Answer

Increase

Answer

Decrease

Answer

Stay the same

Question 25

Which of these is NOT a feature of a market economy?

Accepted Answer

Strict government control of the economy

Answer

Businesses competing with each other

Answer

Consumers getting to choose what they buy

Answer

Businesses aiming to make money

Question 26

When a company makes more products than people want to buy, what might they do?

Accepted Answer

Lower the price

Answer

Raise the price

Answer

Keep the price the same

Question 27

When there are more products available than people want to buy, what is the situation called?

Accepted Answer

Excess supply

Answer

Excess demand

Answer

Market equilibrium

Question 28

When people buy more of a product, what will likely happen to demand for the product?

Accepted Answer

Increase

Answer

Decrease

Answer

Stay the same

Question 29

Which of the following is an example of competition in a market economy?

Accepted Answer

Two companies selling similar products

Answer

A government agency setting prices for goods

Answer

A company having complete control over the market for a product

Answer

A person buying a product from a store

Question 30

What is the difference between a company that makes things and a person who uses them?

Accepted Answer

A company makes things or provides services, while a person uses them.

Answer

A person makes things or provides services, while a company uses them.

Answer

There is no difference between a company and a person.

Answer

A company is always big, while a person is always small.

Question 31

How does competition affect the quality of products?

Accepted Answer

It makes companies try to make better products.

Answer

It makes companies try to make cheaper products.

Answer

It has no effect on the quality of products.

Answer

It reduces the variety of products available.

Question 32

What is market equilibrium?

Accepted Answer

When the amount of something companies want to sell is the same as the amount people want to buy.

Answer

When the price of something is at its highest.

Answer

When the price of something is at its lowest.

Answer

When there is no demand for something.

Question 33

How can the government affect the market economy?

Accepted Answer

It can control prices, production, and give money to certain industries.

Answer

It always makes competition less.

Answer

It is never involved in the market economy.

Answer

It can only intervene in communist economies.

Question 34

When there are more products than people want to buy, what happens to the price?

Accepted Answer

The price goes down.

Answer

The price goes up.

Answer

The number of products goes down.

Answer

The quality of the products gets better.

Question 35

Which of these is NOT a part of a market economy?

Accepted Answer

The government makes all the rules for businesses.

Answer

Businesses are owned by people.

Answer

Businesses compete with each other.

Answer

People can choose what they want to buy.

Question 36

What does competition do in a market economy?

Accepted Answer

It makes prices lower and things better.

Answer

It makes one big business that takes over all the others.

Answer

It stops people from making choices.

Answer

It makes the government control everything.

Question 37

Why do governments sometimes set limits on how high prices can be?

Accepted Answer

To keep them from getting too high

Answer

To keep them from getting too low

Answer

To make more things available

Answer

To make people buy less

Question 38

Who makes things in a market economy, and who buys them?

Accepted Answer

People who make things sell them to people who need them.

Answer

People who need things make them and sell them to people who make things.

Answer

The government makes and sells everything.

Answer

Everyone makes and sells their own things.

Question 39

What is the main reason why businesses exist?

Accepted Answer

To earn money

Answer

To help people

Answer

To create jobs

Answer

To make the government happy

Question 40

Which of these is a good thing about market economies?

Accepted Answer

They make things better and cheaper.

Answer

Everyone has the same amount of money.

Answer

The government controls everything.

Answer

There is no competition.

Question 41

What is something you really need, like food or shelter?

Accepted Answer

A need

Answer

A want

Answer

A luxury

Answer

A service

Question 42

When prices go up over time, what is that called?

Accepted Answer

Inflation

Answer

Deflation

Answer

Recession

Answer

Boom

Question 43

What does NOT affect how much people want of something?

Accepted Answer

How many companies make it

Answer

If they like it

Answer

How much money they have

Answer

If there is something else they can buy instead

Question 44

What is a special feature of our type of economy?

Accepted Answer

Businesses try to make money

Answer

The government makes all the decisions

Answer

People can't choose what they buy

Answer

Prices are decided by how old things are

Question 45

What is a good thing about having businesses compete with each other?

Accepted Answer

Prices go down

Answer

You have fewer choices

Answer

Big companies take over

Answer

Nobody tries new things

Question 46

What is an advantage of an economy that works like a market?

Accepted Answer

Things get made and used wisely

Answer

Everyone has a job

Answer

Prices never change

Answer

Everybody has the same amount of money

Question 47

What's the difference between something you need and something you want?

Accepted Answer

You must have a need to live, but you don't have to have a want

Answer

You must have a want to live, but you don't have to have a need

Answer

You need both needs and wants to live

Answer

There's no difference between needs and wants

Question 48

When there is more of something than people want to buy, the price usually goes:

Accepted Answer

Down

Answer

Up

Answer

Stays the same

Question 49

Which of these is NOT something that changes the price of things?

Accepted Answer

The rules made by the government

Answer

How much people want something

Answer

How much of something is available

Question 50

When there is only one company selling something special, that's called a:

Accepted Answer

Monopoly

Answer

Oligopoly

Answer

Duopoly

Question 51

The rule about how as the price of something goes up, companies make more of it is called the law of:

Accepted Answer

Supply

Answer

Demand

Answer

Economics

Question 52

When the government makes a rule that something can't cost more than a certain amount, that might cause a:

Accepted Answer

Shortage of the product

Answer

Increase in supply

Answer

Decrease in demand

Question 53

When the amount of something that people want and the amount of something available are the same, you have:

Accepted Answer

Equilibrium

Answer

A shortage

Answer

A surplus

Question 54

The spot where the lines showing supply and demand cross is called the:

Accepted Answer

Equilibrium point

Answer

Price line

Answer

Demand line

Question 55

In a market economy, who owns most of the resources?

Accepted Answer

Individuals and businesses

Answer

The government

Answer

No one

Question 56

What is the main goal of a business in a market economy?

Accepted Answer

To make a profit

Answer

To provide jobs

Answer

To help the community

Question 57

What is the law of demand?

Accepted Answer

As price increases, quantity demanded decreases.

Answer

As price increases, quantity demanded increases.

Answer

As price decreases, quantity demanded increases.

Question 58

What is the equilibrium price?

Accepted Answer

The price at which quantity supplied equals quantity demanded.

Answer

The price at which quantity supplied is greater than quantity demanded.

Answer

The price at which quantity demanded is greater than quantity supplied.

Question 59

What is a market failure?

Accepted Answer

A situation in which the market does not produce an efficient outcome.

Answer

A situation in which the government intervenes in the market.

Answer

A situation in which the market is working perfectly.

Question 60

When supply increases and demand remains the same, what happens to the equilibrium price?

Accepted Answer

It decreases

Answer

It increases

Answer

It stays the same

Answer

It becomes negative

Question 61

What is the role of prices in a market economy?

Accepted Answer

To signal scarcity and allocate resources

Answer

To protect consumers from high prices

Answer

To discourage people from buying goods and services

Answer

To control the amount of money in the economy

Question 62

Which of the following is a way that businesses can increase their profits?

Accepted Answer

Both selling more products and spending less money on production

Answer

Selling more products

Answer

Spending less money on production

Answer

Neither selling more products nor spending less money on production

Question 63

What is the main goal of a business?

Accepted Answer

To make a profit

Answer

To provide goods and services to consumers

Answer

To create jobs

Answer

To protect the environment