Year 7 Economics

Supply and Demand

Name: ______________________________

Complete the diagram below:

What is demand?
_________________________________________________________________________
_________________________________________________________________________

What is supply?
_________________________________________________________________________
_________________________________________________________________________

What is the LAW of DEMAND?

Price Law
When prices for
goods and services
RISE…
When prices for
goods and services
FALL…

1
Copy the diagram and complete the table below:

What is happening to What is happening to What is happening to

PRICE (high, med, low) at: DEMAND (high, med, low) QUANTITY (high, med, low)
at: at:
A A A

B B B

C C C

What sort of good or service A B C

would they be?

2
What is the LAW of SUPPLY?

Price Law
When prices for
goods and services
RISE…
When prices for
goods and services
FALL…

Copy the diagram and complete the table below:

What is happening to What is happening to What is happening to

PRICE (high, med, low) at: SUPPLY (high, med, low) QUANTITY (high, med, low)
at: at:
A A A

B B B

C C C

What sort of good or service A B C

would they be?

3
Complete the table of Supply and Demand below:

Object Supply Demand Price

(high/low) (high/low)

A baggy cricket green hat worn by Sir Donald High

Bradman in 1934
($402 500 in 2008 and was up for auction
again in 2011.)

A kilo of bananas Low

(Prices vary but over $2 a kilo)

A midnight blue dress worn by Diana who High

danced with John Travolta at the white house
in 1985
(Just over $270 000 in today’s currency.)

Elizabeth Taylor diamond ring High

(Auctioned for over $3 million)

A loaf of bread
Low
(Prices vary but the cheapest price could be $3)

4
Homework
1. Create a demand graph using the following table of values (price is vertical):

PRICE QUANTITY

10 500
20 450
30 400
40 350
50 300
60 250
70 200

2. Create a supply graph using the following table of values (price is vertical):

PRICE QUANTITY

10 200
20 250
30 300
40 350
50 400
60 450
70 500

3. Using the graphs above, what is the quantity demanded if the price is $10?
____________

4. Using the graphs above, what would be the quantity demanded at a price of $80?
_________. Why is the demand at $80 lower than it is at $10?
_________________________________________________________________________
_________________________________________________________________________

5
5. Create a graph by plotting the quantities of both tables above into the graph below.
Make the demand quantity plots one colour and the supply quantity plots another colour.
After your plots are done, connect the lines and be sure to make the demand and supply
lines different colours.
At which point do the two lines intersect? ______________________________
What is the price of this intersection? _________________________________