ECONOMICS
READING GUIDE
CHAPTER 6
NAME:___________________________________
Using Chapter 6 in your textbook, answer the following questions.
1. What happens at the point where buyers and sellers agree? Use these terms in your answer: market
equilibrium, equilibrium price, equilibrium quantity.
2. Why do competitive markets move toward equilibrium?
3. Explain what happens when prices are set too low.
4. Explain what happens when prices are set too high.
5. Complete the following table about the two types of price controls discussed in Section 6
Price Control
Why Enacted
Examples
Economic Result
ECONOMICS
READING GUIDE
Price
6. Choose a product that interests you. Then create a
newspaper headline announcing an event that would
result in a shift in demand or supply (example to the right).
a. Complete the given graph to show the shift in the
demand or supply curve and the change in
equilibrium price and quantity.
b. Write what happens to the equilibrium price and
equilibrium quantity as a result of the shift.
Quantity
c. Product:
d. Headline:
e. Which curve shifted (Supply or Demand)?
f. Which way did the curve shift?
g. What caused the curve to shift (which TRIBE or ROTTEN factor)?
h. What happened to Equilibrium Price?
i.
What happened to Equilibrium Quantity?
CHAPTER 6
ECONOMICS
READING GUIDE
CHAPTER 6
NAME:___________________________________
Using Chapter 6 in your textbook, answer the following questions.
1. What happens at the point where buyers and sellers agree? Use these terms in your answer: market
equilibrium, equilibrium price, equilibrium quantity.
We call the point where the supply and demand curves meet market equilibrium. This is the point where
amount producers are willing and able to sell meets the point where buyers are willing and able to buy.
This point shows our equilibrium quantity (value on the x-axis) and equilibrium price (value on the y-axis).
2. Why do competitive markets move toward equilibrium?
Money! If producers set prices too high or too low they get less money. Prices being set too low means
they sell out and could have charged more for their product. Prices set too high means they have a surplus
of goods they paid to make but don’t get money from.
3. Explain what happens when prices are set too low.
When prices are too low there is a SHORTAGE where the quantity consumers are willing and able to buy is
greater than the quantity producers are willing and able to sell. More people want to buy the good than
product available.
4. Explain what happens when prices are set too high.
When prices are too high there is a SURPLUS where the quantity producers are willing and able to supply is
greater than the quantity demanded. More product is available than people are willing and able to buy at
that price.
5. Complete the following table about the two types of price controls discussed in Section 6
Price Control
Why Enacted
Examples
Economic Result
Stop prices from going
Farmers, minimum
EXCESS SUPPLY
PRICE FLOOR
too LOW.
wage
PRICE CEILING
Stop prices from going
to HIGH.
Rent control
SHORTAGE
ECONOMICS
READING GUIDE
Price
6. Choose a product that interests you. Then create a
newspaper headline announcing an event that would
result in a shift in demand or supply (example to the right).
a. Complete the given graph to show the shift in the
demand or supply curve and the change in
equilibrium price and quantity.
b. Write what happens to the equilibrium price and
equilibrium quantity as a result of the shift.
Quantity
c. Product:
d. Headline:
e. Which curve shifted (Supply or Demand)?
f. Which way did the curve shift?
g. What caused the curve to shift (which TRIBE or ROTTEN factor)?
h. What happened to Equilibrium Price?
i.
What happened to Equilibrium Quantity?
CHAPTER 6