Module 1: Economic Systems in Canada and the United States
Section 1: Market and Mixed Economies
Lesson 2 - Page 4: Market Economy (ch 6)
Mixed and market economies are influenced by the ever-changing relationship between supply, demand, and price. Supply and demand impacts quality of life because of their effects on the prices of products, the availability of products, and the jobs connected to creating the products. To see how supply and demand works and to further understand the role of the consumer and producer, view the multimedia slide show titled Supply and Demand.
With a learning partner or an adult, check your understanding of supply and demand by answering the two critical thinking challenge questions on the bottom of page 211 of your textbook. Refer back to the slide show if you need help answering the questions.
With a learning partner or an adult, check your understanding of supply and demand by answering the two critical thinking challenge questions on the bottom of page 211 of your textbook. Refer back to the slide show if you need help answering the questions.
Read the case study of the two doughnut shops on page 212 of your textbook.
Complete a comparison chart for the two doughnut shops; you may have to make a few assumptions based on the information provided.
competition: the challenge of a producer to sell a product to consumers when other producers want to sell the same product as well
These two doughnut shops are in competition.
Include the term competition on your Issues for Canadians Definitions handout, and write a definition for the new word. Save your handout to your Portfolio.
Each shop chose a format that would help them compete. They considered the price of materials, the labour costs, and the quality of product.
To keep the prices affordable, the Automatic Doughnut shop chose to make five types of doughnuts with bargain ingredients and machines instead of human labour—in other words, this shop focused on greater supply at a lower price.
Baker’s Dozen Doughnuts chose to have specialized bakers hand make 13 different kinds of doughnuts with high-quality ingredients. This resulted in high-quality doughnuts at a higher price. Each doughnut business answered the three basic economic questions differently because of competition. Consider how they both answered these questions:
A monopoly is the opposite of competition. Have you ever played the board game Monopoly? What is the goal of the game? If you are not sure, ask an adult or your teacher. You may want to challenge yourself and a friend to a friendly game of Monopoly. You may even want to play an online version. Think of yourself as a producer who wants control of everything. What happens to the competition?
Complete a comparison chart for the two doughnut shops; you may have to make a few assumptions based on the information provided.
competition: the challenge of a producer to sell a product to consumers when other producers want to sell the same product as well
These two doughnut shops are in competition.
Include the term competition on your Issues for Canadians Definitions handout, and write a definition for the new word. Save your handout to your Portfolio.
Each shop chose a format that would help them compete. They considered the price of materials, the labour costs, and the quality of product.
To keep the prices affordable, the Automatic Doughnut shop chose to make five types of doughnuts with bargain ingredients and machines instead of human labour—in other words, this shop focused on greater supply at a lower price.
Baker’s Dozen Doughnuts chose to have specialized bakers hand make 13 different kinds of doughnuts with high-quality ingredients. This resulted in high-quality doughnuts at a higher price. Each doughnut business answered the three basic economic questions differently because of competition. Consider how they both answered these questions:
- What goods should be produced?
- How should these goods be produced?
- For whom should the goods be produced?
- land
- labour
- capital
A monopoly is the opposite of competition. Have you ever played the board game Monopoly? What is the goal of the game? If you are not sure, ask an adult or your teacher. You may want to challenge yourself and a friend to a friendly game of Monopoly. You may even want to play an online version. Think of yourself as a producer who wants control of everything. What happens to the competition?
Read
Read “Monopoly versus Competition” on the bottom of page 213 of your textbook to further your understanding of how the government of Canada creates monopolies as a public service.
My Understanding
What role do you believe economic systems play in supplying you with things you use every day? Go to Journal Entry: Role of Economic Systems.
What role do you believe economic systems play in supplying you with things you use every day? Go to Journal Entry: Role of Economic Systems.