NAME
DATE
CLASS
1:Guided
Section
Reading
andReview
Gombining
Supply
andDemand
C
A.AsYouRead
As you read Section1, supply the requestedinformation in the spacesprovided.
In the Case of the Pizzerias
1. The market equilibrium price: $i,lril
rri::r';r
2. The market supply lansl' :-'11it'i
In Any Market Environment
4. How equilibrium is shown on a supply and demandgraph:
t i't,i:; 5a,.j:ii,i'i i: 3 e:l':: ' i:,::! s il itt:
5. Two possibleoutcomesof disequilibrium:
pi'igr-.€
ruiii;r.riee
i.inr.ii
d*man.iequals*;r. '.
6. Supplier price responseto excessdemand: llil;f,;i:is:,-':
7. Condition under which market forceswill push market toward the equilibrium:
.v,/'i:sl't*i'.3r''
ilt i;::"1'iii:r11.'
i1 ji5q.ra;r.,iii,rl"ir.ii'i
a't,si i:i'i..:i:l':::re iiclibi.:
In the Case of Goyernment Intervention
8. Purpose(s)
of rent control:
iaai4L.i
irfi:tj
9. Negativeresultsof endingrent control:
rni;**l lan;iiri'ii* i-fi;:f iii:r:,1'a:yr:
Iri.iid;,'l'.ll i1ti.i ri1;,tr;i:,r'i,:*:,ire-rl".rir,i'-l;itr
r'*;;gh
o
*upfriyr,-r"
leF*r
10. Effect on labor when minimum wage exceedsequilibrium. s:v;r;*'**
prire i'orrrrllkFror!i.ii:*,1
on farms
Ll. Purposeof Northeast Dairy Compact: i:* €ir::ri':nia*e rr:ini*r;ll't'i
,o
o
o
f
u.t
i il it't s i'i e t-'l,,ri c.ii f, irs !"ij n:'i,t i;ti f
c
o
e
(6
B. Reviewing
KeyTerms
o
I
(9
Complete each sentence by writing the correct term in the blank provided.
'When
government'wants to ensure that "essential" goods or services are within the reach
12.
ilrri-;irlr:iiitl14
of all consumers,it may impose a(n)
L 3 . If prices rise too high, a market may face the problem of
':r*r;s* eui:trilr
L4. The one and only price at which quantities supplied equal quantities demanded indicates
eetLriii i;r itrrii
the market
1 5 . Minimum wage is an example of a government-imposed
Pii' n {ir:*r'
.
L6. If car manufacturers produce more or fewer cars thari customers will buy, the car market
will be in
( 34
Ghapter6
;it
' , 1 , . 1 i ": ri ' t ,
GuidedReadingandBeview
NAME
CLASS
DATE
S e c t i o2n:G u i d eR
d e a d i nagn dR e v i e w
Ghanges
in MarketEquilibrium
w
A.AsYouRead
As you read Section2, completethe chart by supplyingan effectfor eachcause.
1. Entiresupplycurveshifts.
2. Technologyfor makingcompactdisc (CD)
playersimproved.
3. After a drop in productioncosr,CD player
suppliersbecomewilling to offer 1,200,000
units at the originalprice,but demandremains
at 1.000.000.
4. Priceof CD playerscontinuesto fall.
5. Productioncostof CD playerscontinuesto
fall.
6. Market's supplycurveshiftsto the left.
6. In the market:
On tbe eqwilibriwmpoint:
7. Demandcurveof a good suddenlyshiftsright.
8. Signsof excessdemand for the good continue
over time.
8. On swppliers:
9. Demand for a good falls.
9, On the demand cwrue:
ri
c
B.Reviewing
KeyTerms
f
UJ
c
g
(!
o
(L
Rewrite each sentenceso that the italicized term is used correctly.
10. shortage occurs when the quantiry demanded falls below the quantity supplied.
(fi
11. Excessdemand for a good indicates a marker swrplwsof that good.
12. Suppliers pay search cosls in the form of financial and opportunity costs as they search for
a good.
GuidedBeadingandReview
Ghapter
6
35
')
NAME
DATE
CLASS
Reading
Section Guided
andReview
TheRoleof Prices
A. AsYouRead
As you read Section 3, answer the questions on the lines provided. f'cs*iri* i;n*l,rersi.:rir:w
heip*i:ve i*ii,i, iab--r,a*ri
1. What overall, vital role do prices play in the free market? Frle:es
a a v i t a l i n t a N h e h a n d svor a
f d u c e r s a n d f i r ' : i eahaeadA a i n t a t h e h a n d abouf v e r s "
2 . What standarddo pricesset?Thsl,eet a ega*dard nle&6ur€cf ualuefor ccodri.
tsil s:j':'i'ri
3 . Whpt signalsdq high prices,sendto producers
and.consumers?Fi4h[,"ic+g
+,o
..,:, ,i ...
produaer6
to produc{more
anJ newprasit;ecrt snterthe rta:k.,!:;lir:y c'i-rlrei' !,i}{tu:tr'.er=
baref ull:tbefaie buuine.
4. \7hy do suppliersuseprice rather than production to resolvethe problem of excess
*frd riLtlelrly,
i;*f, ehansi$Apr+durti+r' .*i ;3
demand? Prioegare flexiblee*d sail he shari4eJerlrrii;y
coetlyandiirneconeumln6.
5. \7hat drives the distribution system in the free market? thq rriliie'rr*of riecisionemadelaii
i- ,i
60n5umer6ana 6upwlter6
6. How does a price-driven economy allow for a wide diversiry of eoods? lr'Tiveqconaunerce
*,udier,r:e
eimilarproductbandailorvspicducercit L:tr4e;r"Y.r
wayLo chaooe.amglg
ih*y *-an;iviih
aoadsNhatwillseilbest i;o that' aaalenee.
'\il7hat
: r ' r ; i l i r . ie: i c { ! ! i f . ,
was the goal of the Soviet planned economy? l u + r € . : : + . t : u . ; { i '
7.
w a ge a u a l
8. How did the Soviet economic system affect consumer goods?
'fh*re
wa* i!';ilevarici-v*f 4ood*,
qaa'lewerehardto eet"
and albhouahinexpensive,
9. How does the free market ensure an efficient allocation of resources??l:efi"e.:triaiheiert*u:'re
that reEourcegao +"'Juieg conguffierevaiuemoEi and f"lrtat,
rr.tource:,=,-rvillaiitr.i';a fraf*uitu:t5'
c h a n a i ndae m a n d s ,
o
10. '$fhat motivates suppliers to increase production in the face of high demand and high
c
prices?prcfit,inccntil,e
IIJ
o
11. What three problems in the free market work against the efficient allocation of resources?
a)
competition,spillcvei^
casL.e.
and inrperfactinforynaf,
imoertecr,
icn
KeyTerms
B.Reviewing
Define the following terms.
12. supplyshock suddenahoriaa* af a aartd
13. rationing dividina ug ezaroeap*d*
and *eryiees usinn eriteria ai.lier *han prloe
ti'rat affeet'fsoFier,,h*hale ns
14. spillover costs coste sf Productioil,sucii*$ air andlwaisr p*llu$icr'i,
aantroloverhowmuchof a a*ad ia pr*duaed
( 36
Ghapter6
9
o
GuidedReadingandReview