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Menu Print Name___________________________________ Date_____________ Class______________ CHAPTER 3 DEMAND CHALLENGE/ENRICHMENT ACTIVITY PLOTTING DEMAND CURVES A demand schedule and a demand curve show the relationship between the price of a product and the quantity of that product demanded by consumers. The demand schedule lists the quantity of a product that consumers are willing and able to buy at a series of prices. The demand curve presents the information in the schedule in graph form. Answer the questions below to learn more about demand schedules and demand curves. 1. Use the data in the schedule below to plot a demand curve for ecobits. Label the curve DC1. Also, correctly label the axes of the graph. Demand Schedule for Ecobits Price per ecobit 5¢ 10¢ 15¢ 20¢ 25¢ 30¢ 35¢ 40¢ Quantity demanded in 400 350 300 250 200 150 100 thousands 50 HRW material copyrighted under notice appearing earlier in this work. Demand Curve for Ecobits 0 2. Use the demand schedule and the demand curve to answer the following: a. If the price of ecobits moves from 30¢ to 40¢, what happens to the quantity of ecobits demanded? Why? ________________________________________________________________ ________________________________________________________________ b. If the price of ecobits moves from 30¢ to 20¢, what happens to the quantity of ecobits demanded? Why? ________________________________________________________________ ________________________________________________________________ CHAPTER 3: CHALLENGE/ENRICHMENT ACTIVITIES 3 Name___________________________________ Date_____________ Class______________ c. Write a generalization about the relationship between price and the quantity demanded. ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ 3. a. Over time, factors other than price can shift the entire demand curve for a product. List these factors. ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ b. Ecobits are not a necessity. Further, a serious recession reduces the disposable income of ecobit consumers. Relative to the curve DC1, which way would the demand curve for ecobits shift? Briefly explain why. ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ On the ecobits demand curve diagram, draw the “new” curve, labeled DC2, parallel to curve DC1. c. Ecobits are suddenly fashionable. Consumers’ taste for ecobits and their willingness to pay more for them have significantly changed. Which way would the demand curve for ecobits shift—to the left or right of DC1? Briefly explain why. ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ On the ecobits demand curve diagram, draw the third curve parallel to curve DC1 and label it DC3. 4 CHAPTER 3: CHALLENGE/ENRICHMENT ACTIVITIES HRW material copyrighted under notice appearing earlier in this work. ________________________________________________________________ Menu Print ANSWER KEY CHALLENGE/ENRICHMENT ACTIVITIES CHAPTER 1 1 2 3 4 B E T R F E E C F C S A I H O N U O R A R T R 5 6 P R O D U I C T I O I 10 T A E L L O C A T R O E 8 A S N O L E C G R Y Y E 9 M 10 V S I 11 I E M A C 12 S P E C I A L R 13 E F O R W H O M CHAPTER 3 1. a. Traditional economy: traditions, customs, and ways of the past. b. Command economy: the government. c. Market economy: individuals in society. 2. Mixed economic systems combine elements of pure economies with one type of economy predominating. For example, a mixed market economy is a predominantly market economy with some command and traditional elements. 3. Essays will vary. You might evaluate essays according to standards in Rubric 37: Writing Assignments, in the Portfolio and Performance Assessment for Social Studies. 1. .40 .35 .30 DC3 .25 Price per Ecobit (in cents) DC1 DC2 .20 .15 .10 .05 0 50 100 150 200 250 300 Quantity in 1,000s 24 ANSWER KEY: CHALLENGE/ENRICHMENT ACTIVITIES 350 400 HRW material copyrighted under notice appearing earlier in this work. CHAPTER 2 Menu Print 2. a. It decreases by 100,000 to 50,000 ecobits, because consumers will buy fewer ecobits when prices are higher. b. It increases by 100,000 to 250,000 ecobits, because consumers will buy more ecobits when prices are lower. c. Typical answer: There is an inverse relationship between quantity demanded and price. Quantity demanded will be higher at lower prices, and lower at higher prices. 3. a. Changes in consumer tastes and preferences, market size, income, prices of related goods, and consumer expectations b. It shifts to the left, indicating decrease in demand for ecobits. Demand falls because consumers have less income to spend on goods, especially products that are not necessities. See 1. above for location of curve. c. It shifts to the right, indicating increase in demand for ecobits. Since the popularity of ecobits has risen, demand will rise, too. See 1. above for location of curve. CHAPTER 4 1. tions; technology, competition, prices or related goods, and producer expectations b. It shifts to the left, indicating a decrease in supply of ecobits. More expensive resources and strict pollution controls will increase production costs. Producers will supply fewer ecobits when production costs are higher. See 1. above for location of curve. c. It shifts to the right, indicating an increase in supply of ecobits. New technology makes production more efficient and less expensive, thus cutting production costs. Producers will supply more ecobits when production costs are lower. Also, greater competition will increase supply, because each producer will supply more ecobits to gain a greater share of the market. See 1. above for location of curve. CHAPTER 5 1. a. Prohibition greatly reduced the market for alcoholic beverages by making their manufacture and sale illegal. This drastically cut the supply of alcoholic beverages, causing the supply curve to shift to the left. S1921 b. .40 S E1 .35 .30 HRW material copyrighted under notice appearing earlier in this work. .25 Price per Ecobit (in cents) E Diagram A SC2 P .20 SC1 .15 D .10 SC3 O .05 0 50 100 150 200 250 300 350 400 Quantity in 1,000s 2. a. It increases by 50,000 to 250,000 ecobits, because suppliers are willing to supply more ecobits when prices are higher. b. It decreases by 50,000 to 250,000 ecobits, because suppliers will supply less when prices are lower. c. Typical answer: There is a direct relationship between price and quantity supplied. Quantity supplied will be higher at higher prices and lower at lower prices. 3. a. Changes in prices of resources; government actions, such as taxes, subsidies, and regula- Q 2. The equilibrium point shifts from E on the old supply curve (S) to E1 on the new supply curve (S1921)—at a higher price. Costs for producers are very high—most notably, producing alcohol is an illegal activity—so they supply less at all prices. Also, consumers are less willing to buy alcohol. b. See 1.b above for placement of E1. 3. Prohibition resulted in a decrease in the supply of alcoholic beverages. Producing and supplying alcohol was illegal and highly expensive. These greater costs caused producers to supply less at all prices. 4. a. The Eighteenth Amendment reduced the size of the market for alcoholic beverages. As a result, there were fewer suppliers who ANSWER KEY: CHALLENGE/ENRICHMENT ACTIVITIES 25