D2.Eco.6.6-8: How Supply and Demand Change Prices in Four Kinds of Markets
In plain English: D2.Eco.6.6-8 is the C3 Framework economics indicator for grades 6-8 that asks students to explain how changes in supply and demand cause changes in prices and quantities of goods and services, labor, credit, and foreign currencies. Students learn four rules for shifts in supply and demand and apply them to wages, interest rates and exchange rates as well as to everyday goods.
Explain how changes in supply and demand cause changes in prices and quantities of goods and services, labor, credit, and foreign currencies.
C3 Framework for Social Studies (NCSS) · Dimension 2: Applying Disciplinary Concepts and Tools · Discipline: Economics · Exchange and Markets · Official standard
D2.Eco.6.6-8 asks students to explain how changes in supply (how much sellers are willing to offer at each price) and demand (how much buyers are willing to buy at each price) cause changes in prices and quantities. The indicator names four kinds of markets: goods and services, labor, credit and foreign currencies. In each one something has a price: a good's price, a worker's wage, the interest rate on a loan, and the exchange rate of a currency. The same four rules explain all of them.
Students learn the four rules with two to-scale graphs (Diagrams 1 and 2) and worked examples from each kind of market. They read a royal order from 1349 (Source 1) that tried to stop wages from rising after the Black Death, and court records from 1351 (Source 2) showing what workers and craftsmen actually charged. They then analyze four invented markets in one farming town (Source 3). Activities include a card sort of market events, a classroom trading game with a supply shock, and a gallery walk through the four kinds of markets.
Learning Objectives
By the end of this lesson, students will be able to:
Define supply, demand and equilibrium price, and tell a change in supply from a change in demand
Use the four rules to predict how price and quantity change when supply or demand increases or decreases
Identify the price in labor, credit and foreign currency markets (wage, interest rate, exchange rate) and explain how it changes
Use evidence from primary sources and an invented scenario to explain a change in price and quantity
Calculate changes in prices, wages, interest and exchange costs
Prior Knowledge Required
Students should already be comfortable with:
Explaining the roles of buyers and sellers in product, labor and financial markets D2.Eco.3.6-8
Describing how competition helps determine prices and wages D2.Eco.4.6-8
Finding a percent of a quantity and percent change 7.RP.A.3
Reading a graph and connecting it to a text RH.6-8.7
"Tickets to a school play usually cost $8. Then a famous actor who went to your school agrees to appear in it. What do you think happens to the ticket price and to the number of tickets sold, and why? What if the theater's roof leaked and half the seats could not be used?"
Take a few predictions for each case and write them on the board without judging them. Tell students that the first case changes what buyers want (demand) and the second changes what sellers can offer (supply). D2.Eco.6.6-8 asks them to explain how such changes move prices and quantities, not only for goods like tickets but also for workers, loans and foreign money.
Direct Instruction15-20 minutes
Key terms for D2.Eco.6.6-8 (working definitions)
Term
Meaning
Example
Demand
How much buyers are willing and able to buy at each price
At $2 a slice, students would buy 300 slices of pizza a week
Supply
How much sellers are willing and able to offer at each price
At $2 a slice, the cafeteria would make 250 slices a week
Equilibrium price
The price at which the amount buyers want equals the amount sellers offer
The price at which every slice made is sold, with none left over
Increase or decrease in demand
Buyers want more (or less) at every price, so the demand curve shifts right (or left)
A new study says pizza is healthy
Increase or decrease in supply
Sellers offer more (or less) at every price, so the supply curve shifts right (or left)
The price of cheese doubles
Labor market
Where workers sell their time and employers buy it; the price is the wage
Stores hiring cashiers at $15 an hour
Credit market
Where savers lend and borrowers borrow; the price is the interest rate
A bank lending $1,000 at 6% a year
Foreign exchange market
Where one country's money is traded for another's; the price is the exchange rate
Paying $1.10 for one euro
Part 1: The four rules. Show Diagrams 1 and 2, then write the rules on the board:
Demand increases: price rises and quantity rises.
Demand decreases: price falls and quantity falls.
Supply increases: price falls and quantity rises.
Supply decreases: price rises and quantity falls.
Part 2: Ask two questions every time. First, whose behavior changed: buyers (demand) or sellers (supply)? Second, do they want or offer more, or less? Then apply the rule. A change in price by itself does not shift a curve; it is the result of a shift. Work these examples, one from each kind of market.
Goods: an increase in demand (invented)
During a heat wave, many more families want electric fans. A hardware store that sold about 40 fans a week at $25 now sells about 55 a week at $30. Which curve shifted, and how much did the price change in percent?
Result: Buyers changed: demand increased, so price and quantity both rose. Price: (30 - 25) / 25 = 0.20, a 20% rise. Quantity: 55 - 40 = 15 more fans a week.
Labor: an increase in supply (invented)
An amusement park hires summer workers. This year many more college students are looking for summer jobs nearby. The park hires about 150 workers instead of 120 and pays $14 an hour instead of $15. Which curve shifted?
Result: Workers are the sellers in a labor market, so more students looking for work is an increase in the supply of labor. The wage (the price) fell by $1, and the number of workers hired (the quantity) rose by 150 - 120 = 30.
Credit: a decrease in supply (invented)
Banks in a city decide to lend less money because they worry that borrowers will not repay. The interest rate on a one-year business loan rises from 6% to 7.5%, and banks make about 420 loans instead of 500. How much more interest does a business pay on a $10,000 loan for one year?
Result: Lenders are the sellers in the credit market, so lending less is a decrease in supply: the price (interest rate) rose and the quantity (number of loans) fell by 80. Interest at 6%: 0.06 x 10,000 = $600. At 7.5%: 0.075 x 10,000 = $750. The business pays $150 more.
Foreign currency: a decrease in demand (invented)
Corvania is a fictional country whose money is the crown. Fewer Americans travel to Corvania this year, so fewer people want to buy crowns. The price of one crown falls from $0.80 to $0.70. What does a 50-crown museum ticket cost in dollars before and after?
Result: Fewer buyers of crowns is a decrease in demand, so the price of a crown falls. Before: 50 x $0.80 = $40. After: 50 x $0.70 = $35. For Americans who still go, Corvania got cheaper by $5 on that ticket.
Teacher tip. Students often mix up who the buyers and sellers are outside goods markets. In the labor market, workers supply and employers demand. In the credit market, savers and banks supply loans and borrowers demand them. In a currency market, the people who want a currency are its buyers. Have students label the buyer and the seller before they draw any graph.
Guided Practice15 minutes
Wages after the Black Death. Context note: the Black Death, a plague, reached England in 1348. Historians estimate that between a third and a half of England's people died within about two years. In June 1349 King Edward III and his council sent the order in Source 1 to every sheriff (the king's officer in each county). It was translated from Latin into English for a 1914 book of historical documents. In 1351 Parliament turned the order into a law, the Statute of Labourers. Source 1 gives the view of the King and the landowners, not of the workers. Read Source 1 aloud. Glossary: "sheriff" (the king's officer in a county), "servants" (here, hired workers on farms and in homes), "lords" (landowners who hired workers), "excessive" (too high), "dearth" (shortage), "tillers" (people who work the soil), "ordain" (order), "realm" (kingdom), "liveries" (food, clothing or other goods given as pay), "the twentieth year of our reign" (1346-1347, before the plague), "accustomed" (usual), "artificers" (skilled craft workers), "tawyers" (leather makers), "victuals" (food), "hostlers" (innkeepers).
1The King to the sheriff of Kent, greeting. Because a great part of the people and specially of the workmen and servants has now died in this plague, some, seeing the necessity of lords and the scarcity of servants, will not serve unless they receive excessive wages, and others preferring to beg in idleness rather than to seek their livelihood by labour: we, weighing the grave disadvantages which might arise from the dearth specially of tillers and workmen, [...] have thought fit to ordain that every man and woman of our realm of England, [...] able-bodied and under the age of sixty years, [...] shall receive only the wages, liveries, hire or salaries which used to be offered in the places where he should serve in the twentieth year of our reign of England, or in the five or six common years last preceding; [...]
[...]
2Furthermore no man shall pay or promise to pay to any man more wages, liveries, hire or salaries than is accustomed, as is aforesaid, nor shall any man in any wise demand or receive the same, under penalty of the double of that which shall be so paid, promised, demanded or received, [...]
3Moreover saddlers, skinners, tawyers, shoemakers, tailors, smiths, carpenters, masons, tilers, boatmen, carters and other artificers and workmen whosoever shall not take for their labour and craft more than used to be paid to such in the twentieth year and other common years preceding in the places in which they chance to be employed, as is aforesaid; [...]
4Moreover butchers, fishermen, hostlers, brewers, bakers, poulterers and all other sellers of victuals whatsoever shall be bound to sell such victuals for a reasonable price, regard being had to the price at which such victuals are sold in the neighbouring places; so that such sellers have a moderate profit and not excessive, [...]
Edward III, King of England, translated in Bland, Brown and Tawney, English Economic History: Select Documents, The Ordinance of Labourers, 1349 (Source 1) (1349; this edition 1914). Public domain (published 1914). Source text.
Sourcing. Prompt: who issued this order, to whom, and why would they want it obeyed? Teacher note: the King and his council, writing to sheriffs; landowners who hired workers wanted to keep paying what they used to pay. Workers' voices are missing.
The change. Prompt: in paragraph 1, what happened to the number of workers, and how did surviving workers respond? Did the buyers or the sellers of labor change? Teacher note: point students to the "workmen and servants" who died, the "scarcity of servants," and workers who would "not serve unless they receive excessive wages." Have them name the buyers (lords and other employers) and the sellers (workers) before they decide which curve changed. Collect their answers without confirming them yet: quiz questions 16 and 20 assess this reasoning, so review it with the class after the quiz.
Draw it. Prompt: sketch a labor market with the wage on the vertical axis and the number of workers hired on the horizontal axis. Shift the curve that changed, using Diagrams 1 and 2 as models. Teacher note: check that students label both axes, shift only the curve they chose in step 2, and mark the old and new equilibrium. Hold the answers about the wage and the number hired for the quiz.
Who breaks the rule? Prompt: according to paragraph 2, who could be punished: the person who pays more, the person who takes more, or both? Teacher note: both. No one may "pay or promise to pay" more than the accustomed wage, and no one may "demand or receive" it. The order tried to control both sides of the labor market.
Independent Practice10-15 minutes
Four new events. Students work alone. For each invented event in the table, they decide which market it is, whether supply or demand changed, in which direction, and what happens to the price and the quantity. Then they read Source 2, the 1351 court records, on their own. Glossary for Source 2: "present" (formally charge someone), "threefold" (three times as much), "divers folk" (various people), "s." (shillings), "is at his table" (also gets his meals from his employer), "sawyer" (a person who saws logs into boards), "in oppression of the people" (in a way that harms the public).
Independent practice: four invented events
Event
Market
A new factory starts making phone cases, so stores have many more to sell
Goods
A large factory in town closes, so employers need fewer machine operators
Labor
Businesses in a slow year decide to borrow much less money
Credit
People in Corvania decide to keep their savings at home instead of trading crowns for dollars
Foreign currency
[...]
1Trespass.--Further, they present that Robert Grys of Danbury, potter, makes brass pots and sells them at threefold the price which he used [to take], against the Statute, etc., in oppression of the people.
2Trespass.--Further, they say that John Sextayn the younger, tailor, John Banestrat, tailor, Roger atte Tye of Great Baddow, take salaries for their labours from divers folk against the Statute, etc., and this threefold that which they used to take.
3Trespass.--Further, they say that William Denk, servant of Geoffrey le Smyth, took from the said Geoffrey 20s. a year, and is at his table, and was sworn before John de Sutton and his fellows to serve according to the Statute, etc., where he should not take but 8s., etc....
4Trespass.--Further, they present that Richard Smyth of Great Baddow commonly takes for his work double that which he used to take, against the Statute.
5Trespass.--Further, they present that John Plukkerose, William Smyth of Danbury and William Molt, shoemakers, of Great Baddow, make shoes and sell them at almost double the price which they used [to take], against the Statute, etc., in oppression of the people.
6Trespass.--Further, they say that Alan son of Sayer Banstrat of Great Baddow, sawyer, will not serve unless he take for his salary as much as two others take, against the Statute, etc., in oppression of the people....
Jurors of the Hundred of Chelmsford, Essex, translated in Bland, Brown and Tawney, English Economic History: Select Documents, Presentments Made Before the Justices of Labourers, Hundred of Chelmsford, 1351 (Source 2) (1351; this edition 1914). Public domain (published 1914). Source text.
Teacher answers for the table: phone cases, supply increases, so the price falls and the quantity sold rises. Machine operators, demand for labor decreases, so the wage falls and the number employed falls. Business loans, demand for credit decreases, so the interest rate falls and the amount lent falls. Crowns, fewer crowns are offered for dollars, a decrease in supply, so the price of a crown rises and fewer crowns are traded. Collect the answers; the quiz uses Source 2.
Closure10-15 minutes
One town, four markets. Introduce Source 3, an invented scenario about a farming town. Students read it on their own; it is used in the quiz and the homework.
1Invented scenario, written for this page. Orchard Valley is a fictional farming town. Here is what happened in four of its markets this year.
2Peaches. A hard frost in April killed many peach blossoms, so farmers brought far fewer peaches to the Saturday market. A basket that sold for $4 last summer sold for $6 this summer, and the market sold about 350 baskets a week instead of 500.
3Apple pickers. The apple trees, untouched by the frost, grew a huge crop. Orchards wanted far more pickers than usual to bring it in. They raised the hourly wage from $15 to $18 and hired about 260 pickers instead of 200. Pickers usually work 30 hours a week.
4Loans. In June a hailstorm damaged hundreds of roofs. Many families went to Valley Savings Bank at the same time to borrow money for repairs. The bank raised the interest rate on its one-year home-repair loans from 7% to 8%, and it made about 300 of these loans instead of the usual 180.
5Foreign money. Velmora is a fictional country whose money is the velo. This year a famous music festival in Velmora drew many more American visitors, and each one needed velos to spend there. At the start of the year, one velo cost $0.50 at the airport exchange counter. By festival time, one velo cost $0.60.
SVHS (invented scenario written for this page), One Year in Orchard Valley (Source 3: invented scenario). Original passage written for this page.
Exit ticket: Pick one of the four markets in Source 3. Write one sentence naming whether supply or demand changed and in which direction, and one sentence explaining what happened to the price and the quantity.
Teacher note on the sources: Sources 1 and 2 are quoted exactly from a 1914 English translation. Source 1 speaks of people who "beg in idleness" and Source 2 of charges "in oppression of the people"; both reflect the landowners' point of view, and workers left few written records of their own. The court records name real people, as the original rolls do. Source 3 is invented, and Velmora and Corvania are fictional countries. The lesson takes no position on any current wage, interest-rate or currency policy.
Differentiation Strategies
For Struggling Students
Give a four-rules card with a small graph for each rule, and a two-question checklist: "Buyers or sellers? More or less?"
Provide a buyer-and-seller chart for each kind of market (goods, labor, credit, foreign currency) before students start Source 3
Read Sources 1 and 2 aloud one paragraph at a time and restate each in one plain sentence
For Advanced Students
Predict what happens when supply and demand change at the same time, for example a frost that cuts the peach crop in the same summer a recipe makes peaches popular, and explain why one of price or quantity cannot be predicted without numbers
Use Source 2 to argue whether the Ordinance of Labourers worked, citing at least three charges
Write a short explanation of why a stronger dollar makes trips abroad cheaper for Americans
Assessment Guidance
What to Look For
Strong answers identify the market, name the buyers and sellers, say whether supply or demand changed and in which direction, and state what happened to both the price and the quantity, with a number or quotation from a source. Watch for four confusions: treating a price change as the cause of a shift instead of its result; mixing up who supplies labor (workers) and who demands it (employers); forgetting that the price of credit is the interest rate and the price of a currency is the exchange rate; and changing only the price while ignoring the quantity.
02
Classroom Activities
3 Activities
1
Shift It! Card Sort
15 minPairs
Pairs sort 12 event cards onto a mat with four boxes: demand up, demand down, supply up, supply down. For each card they write the market, the price that changes (price, wage, interest rate or exchange rate) and arrows for price and quantity.
The 12 Event Cards (invented)
A popular singer wears a brand of sneakers, and teens rush to buy them.
A drought ruins much of the wheat crop.
A new machine makes bicycles faster and cheaper to build.
A new hospital opens and needs many more nurses.
Many truck drivers retire in the same year.
Self-checkout machines mean grocery stores need fewer cashiers.
A new neighborhood is built, and many families want home loans.
Banks lose money on loans that were not repaid and decide to lend less.
Businesses cancel plans to expand and borrow less.
Video games made in Corvania become popular in the United States, so American stores need more crowns to buy them.
Fewer American companies buy parts from Corvania, so they need fewer crowns.
Corvanian tourists stop visiting the United States, so fewer crowns are offered in exchange for dollars.
Sample Answers for the Teacher
Demand up: cards 1 (sneakers: price up, quantity up), 4 (nurses: wage up, number hired up), 7 (home loans: interest rate up, loans up) and 10 (crowns: price of a crown up, crowns traded up).
Supply down: cards 2 (wheat: price up, quantity down), 5 (truck drivers: wage up, drivers working down), 8 (loans: interest rate up, loans down) and 12 (crowns: price of a crown up, crowns traded down).
Discussion Questions
Which cards were hardest to sort, and why?
In card 5, who are the sellers in the market? How do you know?
Modification for English Learners
Add a small picture to each card and give the four box labels with arrows (demand up, demand down, supply up, supply down) in English and the student's home language.
2
Bread Market Trading Game
20 minWhole class (20 students; extra students record trades)
Ten students are bakers (sellers) and ten are shoppers (buyers) of one loaf of bread each. Each card shows a secret number: the lowest price a baker will accept or the highest price a shopper will pay. Students make deals in an open trading pit, then play again after a drought.
A deal happens when a shopper and a baker agree on a whole-dollar price between their two numbers. The recorder writes each price on the board.
Rounds
Round 1 (5 minutes): trade freely. Record every price.
Round 2 (5 minutes): announce a drought: the three bakers with the lowest numbers ($2, $3 and $3) have no flour and sit out. Trade again.
Compare the typical price and the number of loaves sold in the two rounds.
Numbers for the Teacher
Round 1: at $5, 8 shoppers would buy and 7 bakers would sell; at $6, 7 would buy and 8 would sell. Expect prices to settle around $5-$6 with about 7 loaves sold.
Round 2: at $6, 7 shoppers would buy but only 5 bakers would sell; at $7, 5 would buy and 6 would sell. Expect prices around $6-$7 with about 5 loaves sold.
The drought is a decrease in supply: the price rose and the quantity fell, as in Diagram 2. Real classroom results vary a little; that is part of the discussion.
Discussion Questions
Which shoppers stopped buying in round 2, and why?
How would the game change if three new shoppers with $9 cards joined instead?
3
Four Markets Gallery Walk
20 minGroups of 4, rotating
Four posters around the room each describe one invented market change. At each station, the group names the buyers and sellers, decides which curve shifted and in which direction, sketches the graph on graph paper and calculates one change.
The Four Stations (invented)
Services: a new hair salon opens in town. The usual haircut price falls from $30 to $26, and salons give about 1,000 haircuts a month instead of 900. Calculate the percent change in price.
Labor: a very snowy winter means the city needs more snowplow drivers. The hourly wage rises from $22 to $26, and 52 drivers work instead of 40. Calculate the change in pay for a 40-hour week.
Credit: a car company's big sale makes many people want car loans at once. The interest rate rises from 5% to 5.5%. Calculate the first year's interest on a $12,000 loan at each rate.
Foreign currency: a hit movie from Corvania makes Corvanian goods popular, so Americans want more crowns. The price of a crown rises from $0.70 to $0.76. Calculate the dollar cost of a 200-crown jacket at each price.
Sample Answers for the Teacher
Station 1: supply of haircuts increased; (30 - 26) / 30 is about a 13% fall in price.
Station 2: demand for labor increased; ($26 - $22) x 40 = $160 more a week.
Station 3: demand for credit increased; $12,000 x 0.05 = $600 and $12,000 x 0.055 = $660.
Station 4: demand for crowns increased; 200 x $0.70 = $140 and 200 x $0.76 = $152.
Discussion Questions
At which station was it hardest to name the buyers and the sellers?
Which stations showed the price and the quantity moving in the same direction? What rule explains that?
03
Diagrams & Visual Aids
2 diagrams
Diagram 1: An Increase in Demand Raises Price and Quantity
Drawn to scale with invented straight-line curves: demand D1 (price = 10 - quantity) shifts right to D2 (price = 12 - quantity) while supply S (price = 2 + quantity) stays the same. The equilibrium moves from A (4 units at $6) to B (5 units at $7). The same picture works for wages, interest rates and exchange rates when demand for labor, credit or a currency rises.
Diagram 2: A Decrease in Supply Raises Price and Lowers Quantity
Drawn to scale with invented straight-line curves: supply S1 (price = 2 + quantity) shifts left to S2 (price = 4 + quantity) while demand D (price = 10 - quantity) stays the same. The equilibrium moves from A (4 units at $6) to B (3 units at $7). An increase in supply is the opposite shift: price falls and quantity rises.
04
Homework Assignment
~30 min
D2.Eco.6.6-8 Homework: Supply, Demand and Four Kinds of Markets
Directions: Part 1 uses invented events. Part 2 uses Sources 2 and 3 in the lesson plan. For every event, say whether supply or demand changed, in which direction, and what happens to the price and the quantity. Show any arithmetic.
Part 1: Events in Four Markets (Problems 1-3)
Invented headlines: (a) "Hurricane damages orange groves." (b) "New car factory will hire 2,000 workers." (c) "Families rush to borrow as home building booms." (d) "Fewer Americans plan trips to Corvania." For each, name the market (goods, labor, credit or foreign currency), the change in supply or demand, and the effect on price and quantity.
Draw and label a supply and demand graph for tickets to a town fair when a famous band agrees to play there. Label the old and new curves, the old and new equilibrium points, and the axes. Explain your graph in two sentences.
Invented example: restaurants in a growing town need more cooks, and the hourly wage for cooks rises from $16 to $18.50. (a) By what percent did the wage rise? (b) How much more does a cook earn in a 35-hour week? (c) Which change in the labor market explains the rise?
Part 2: Using the Sources (Problems 4-6)
Use Source 2. Richard Smyth "commonly takes for his work double that which he used to take." Invented figures: if he used to take 3 pence a day, how much did he now take for a 6-day week, in pence and in shillings (12 pence = 1 shilling)? Then explain the cause using supply and demand.
Invented follow-up to Source 3: a year after the storm, Valley Savings Bank lowers its home-repair loan rate from 8% to 6.5%. (a) How much interest would a family pay on a $3,000 loan for one year at each rate? (b) Give one change in the supply of or demand for credit that could explain the lower rate.
Write a paragraph of 5-7 sentences explaining how changes in supply and demand changed prices in two different kinds of markets from the lesson (for example, labor in 1351 and foreign currency in Orchard Valley). For each, name the change, the price that moved, and what happened to the quantity, with evidence.
Rubric
Criterion
Full Credit (2 pts)
Partial Credit (1 pt)
No Credit (0 pts)
Identifying the Change
Correctly names supply or demand and the direction in every event
Correct in most events
Mostly incorrect
Price and Quantity
States the effect on both price and quantity, including wages, interest rates and exchange rates
Gives price or quantity only
No effects stated
Evidence and Math
Accurate evidence; Problems 3-5 correct with work
An arithmetic slip or loose evidence
No evidence; work missing
Graph
Problem 2 graph labeled and shifted correctly
Graph shifted correctly but labels missing
No graph or wrong shift
05
Quiz: 20 Questions
Interactive, with answers
Instructions
Questions 1-3 use Source 1 (1349) in Guided Practice. Questions 4-7 and 16 use Source 2 (1351) in Independent Practice. Questions 8-15 use Source 3, the invented Orchard Valley scenario in Closure, and Questions 17-19 are invented follow-ups to it. Question 20 uses Sources 2 and 3. Your score updates as you answer, and Reset quiz clears everything.
Multiple choice: pick an option to check it. Short answer: write your answer, then reveal the model answer.
0 of 20 answered · 0 correct
Question 1 of 20 · Multiple Choice
Source 1, paragraph 2, says anyone who pays or takes more than the accustomed wage faces a penalty of "the double of that which shall be so paid." A lord pays a reaper 3 shillings more than the accustomed wage. What is the lord's penalty?
Answer: B
The penalty is double the amount paid beyond the rule: 2 x 3 = 6 shillings. Choice A is the extra pay itself, not double it. Choice C halves the amount instead of doubling it. Choice D doubles twice (3 x 2 x 2).
Question 2 of 20 · Multiple Choice
According to Source 1, paragraph 4, what rule did the order set for butchers, bakers and other sellers of food?
Answer: C
Food sellers "shall be bound to sell such victuals for a reasonable price, regard being had to the price at which such victuals are sold in the neighbouring places," with "a moderate profit and not excessive." Choice B is the opposite of the rule. Choices A and D are not in the order.
Question 3 of 20 · Multiple Choice
Source 1 ordered employers to pay only the wages of 1346-1347, before the plague, even though far fewer workers were alive. Using supply and demand, what would you predict at that old wage?
Answer: B
With fewer workers, the old wage was below the new equilibrium wage. At a price below equilibrium, buyers (here, employers) want more than sellers (workers) offer, so employers would want more workers than they could hire. Choice A describes a wage set above equilibrium, the opposite case. Choice C does not follow: the scarcity pushed wages up, not down. Choice D is unrelated to the wage rule and contradicts paragraph 4's worry about excessive food prices.
Question 4 of 20 · Multiple Choice
In Source 2, William Denk took 20s. a year when he "should not take but 8s." How many times the legal wage did he take?
Answer: D
20 / 8 = 2.5, so he took two and a half times the legal wage. Choice A is the difference in shillings (20 - 8 = 12), not a number of times. Choice B is the increase divided by the legal wage (12 / 8 = 1.5), which says how much more he took, not how many times the legal wage. Choice C divides the wrong way (8 / 20).
Question 5 of 20 · Multiple Choice
In Source 2, the potter Robert Grys sells brass pots "at threefold the price which he used" to take. If a pot used to cost 5 pence, about what did he charge now?
Answer: A
Threefold means three times as much: 3 x 5 = 15 pence. Choice B adds 3 pence instead of multiplying (5 + 3). Choice C multiplies by four. Choice D is the old price, the one the Statute required.
Question 6 of 20 · Multiple Choice
Source 2 says the shoemakers of Great Baddow sold shoes "at almost double the price which they used." Which change in the shoe market best explains this, given Source 1?
Answer: A
Source 1 shows that skilled workers such as shoemakers had become scarce and expensive after the plague. When it costs more to make shoes and fewer people make them, the supply of shoes decreases, so the price rises. Choice B describes a change that would push prices down, not up. Choice C reverses the direction of supply. Choice D contradicts both sources: the Statute forbade higher prices.
Question 7 of 20 · Multiple Choice
What do the charges in Source 2 suggest about the order in Source 1?
Answer: C
Two years after the order, juries charged tailors, a servant, a smith, shoemakers and a sawyer with taking double or triple the old rates, so the pull of supply and demand was stronger than the law. Choice A is contradicted by the many charges. Choice B is the opposite of what the records show. Choice D is wrong: everyone charged in the excerpt is a worker or craftsman.
Question 8 of 20 · Multiple Choice
In Source 3, a frost killed many peach blossoms. Which change happened in the peach market, and what happened to the price and the number of baskets sold?
Answer: D
The frost changed what sellers could offer, so supply decreased: the price rose from $4 to $6 and sales fell from 500 to 350 baskets a week. Choice A blames buyers, who did not change. Choice B reverses the supply change. Choice C would make quantity rise, but fewer baskets were sold.
Question 9 of 20 · Multiple Choice
By what percent did the price of a basket of peaches rise in Source 3?
Answer: B
The price rose by $6 - $4 = $2, and 2 / 4 = 0.5, or 50%. Choice A divides by the new price (2 / 6). Choice C treats the $2 increase as a percent. Choice D gives the new price as a percent of the old one (6 / 4 = 150%), not the increase.
Question 10 of 20 · Multiple Choice
In Source 3, orchards raised pickers' pay and hired more pickers. Which change explains both results?
Answer: A
Employers are the buyers in a labor market. The big apple crop made orchards want more pickers at every wage, an increase in demand, so the wage rose ($15 to $18) and the number hired rose (200 to 260). Choice B would raise the wage but lower the number hired. Choice C would lower the wage. Choice D would lower both.
Question 11 of 20 · Multiple Choice
A picker in Source 3 works 30 hours a week. How much more does that picker earn each week at the new wage than at the old one?
Answer: D
The wage rose by $18 - $15 = $3 an hour, and $3 x 30 = $90 a week. Choice A is the hourly raise, not the weekly one. Choice B is the new weekly pay ($18 x 30). Choice C is the old weekly pay ($15 x 30).
Question 12 of 20 · Multiple Choice
After the hailstorm in Source 3, the bank raised its loan rate and made more loans. Which change in the credit market explains this?
Answer: B
Borrowers are the buyers in the credit market. Many families wanted repair loans at once, an increase in demand, so the price of credit (the interest rate) rose from 7% to 8% and the number of loans rose from 180 to 300. Choice A is an increase in supply, which would lower the rate. Choice C would raise the rate but reduce the number of loans. Choice D would lower both.
Question 13 of 20 · Multiple Choice
A family in Source 3 borrows $6,000 for one year to fix its roof. How much more interest does it pay at 8% than it would have paid at 7%?
Answer: A
At 8%: 0.08 x 6,000 = $480. At 7%: 0.07 x 6,000 = $420. The difference is $480 - $420 = $60. Choices B and C are the interest at each rate, not the difference. Choice D uses 0.1% instead of 1 percentage point (0.001 x 6,000).
Question 14 of 20 · Multiple Choice
In Source 3, the price of one velo rose from $0.50 to $0.60. What caused this change?
Answer: C
Americans who buy velos are the buyers in this currency market. More visitors needing velos is an increase in demand, so the price of a velo, the exchange rate, rose. Choice A would be an increase in supply, which lowers the price. Choice B would be a decrease in demand, which also lowers the price. Choice D is not in the scenario.
Question 15 of 20 · Multiple Choice
Use Source 3. A hotel room in Velmora costs 120 velos a night. How much more does a night cost an American, in dollars, at festival time than at the start of the year?
Answer: C
At the start: 120 x $0.50 = $60. At festival time: 120 x $0.60 = $72. The night costs $72 - $60 = $12 more. Choices A and B are the costs at each exchange rate, not the difference. Choice D is the change in the price of one velo, not of the room.
Question 16 of 20 · Short Answer
In Source 2, Alan the sawyer "will not serve unless he take for his salary as much as two others take." Use supply and demand in the labor market to explain why he could ask for so much in 1351.
Model answer: After the plague killed so many workers, the supply of labor fell, while landowners still needed work done, so the wage that balanced the labor market rose far above the old rate. A sawyer was a skilled worker who was now scarce, so employers who needed boards cut had to pay what he asked or go without, even though the Statute forbade it. Rubric: 1 point for identifying a decrease in the supply of labor; 1 point for explaining how it raised the wage, with evidence from Source 1 or 2.
Question 17 of 20 · Short Answer
Invented follow-up to Source 3: next spring, many Orchard Valley families deposit their apple-harvest earnings at Valley Savings Bank, so the bank has much more money to lend. Predict what happens to the interest rate and to the number of loans, and explain why.
Model answer: Savers and banks are the sellers of credit, so more money to lend is an increase in the supply of credit. When supply increases, the price falls and the quantity rises: the interest rate should fall, and the bank should make more loans, because it competes to lend out the extra money. Rubric: 1 point for naming an increase in supply; 1 point for a correct prediction of both the rate (down) and the number of loans (up).
Question 18 of 20 · Short Answer
Invented follow-up to Source 3: after the festival, Velmorans fall in love with American sneakers, and many of them trade velos for dollars so they can buy them. What happens to the dollar price of a velo, and why?
Model answer: Velmorans who trade velos for dollars are sellers of velos, so more of them is an increase in the supply of velos. When supply increases, the price falls, so a velo will cost fewer dollars than before, and more velos will be traded. Rubric: 1 point for identifying an increase in the supply of velos; 1 point for the correct direction of the price with a reason.
Question 19 of 20 · Short Answer
Invented example: many people in Orchard Valley buy exercise bikes for their homes, so fewer want monthly memberships at the town's gym. Explain what happens to the price and the number of gym memberships sold.
Model answer: Gym memberships are a service, and the change is in what buyers want, so demand decreases. When demand decreases, both the price and the quantity fall: the gym will likely lower its monthly price, and fewer memberships will be sold. Rubric: 1 point for naming a decrease in demand for a service; 1 point for predicting that both price and quantity fall.
Question 20 of 20 · Short Answer
A student says: "Pay went up in both 1351 England and Orchard Valley, so the cause must be the same." Do you agree? Use Sources 2 and 3 and explain what happened to the number of workers in each case.
Model answer: I disagree. In 1351 pay rose because the supply of labor fell: so many workers had died that the survivors could charge double or triple the old rates (Source 2). With a decrease in supply, fewer workers are employed. In Orchard Valley pay rose because the demand for labor rose: orchards needed more pickers for a huge crop, so they raised the wage from $15 to $18 and hired 260 instead of 200. Both changes raise the wage, but the number of workers moves in opposite directions. Rubric: 1 point for each correct cause (2 points); 1 point for the opposite movement in the number of workers.
0 of 20 answered · 0 correct
06
Frequently Asked Questions
10 Questions
What does D2.Eco.6.6-8 mean?
D2.Eco.6.6-8 asks middle school students to explain how changes in supply and demand change prices and quantities. The full text is "Explain how changes in supply and demand cause changes in prices and quantities of goods and services, labor, credit, and foreign currencies." Students must apply the idea to all four kinds of markets it names, not only to goods.
What is the difference between supply and demand?
Demand is about buyers: how much they are willing and able to buy at each price. Supply is about sellers: how much they are willing and able to offer at each price. A useful first question for any event is "Did the buyers change, or the sellers?"
What are the four rules of supply and demand shifts?
When demand increases, price and quantity both rise; when demand decreases, both fall. When supply increases, price falls and quantity rises; when supply decreases, price rises and quantity falls. Diagrams 1 and 2 show two of the four rules drawn to scale.
Why is a wage a price?
A wage is the price of labor: workers sell their time and employers buy it. That makes workers the suppliers and employers the demanders in a labor market, which surprises many students at first. The same four rules apply, with the wage as the price and the number of workers as the quantity.
What is the price of credit?
The interest rate. Savers and banks supply credit, and borrowers demand it, so the four rules apply with the interest rate as the price and the amount lent as the quantity. A useful first step is to decide whether an event changes the borrowers or the lenders.
How do supply and demand change exchange rates?
An exchange rate is the price of one country's money in another's. People who want a currency, for example to travel or to buy goods, are its buyers, and people who offer it in exchange are its sellers, so the four rules apply with the exchange rate as the price. The lesson uses fictional currencies so that the numbers cannot be mistaken for real rates.
Why does the lesson use sources from 1349 and 1351?
The Black Death caused one of the best-documented labor market changes in history. A royal order and a set of court records let students see the change, the government's response and people's reactions in their own words, written within three years of the plague's arrival.
How is D2.Eco.6.6-8 different from D2.Eco.6.9-12?
They cover different ideas. The grades 6-8 indicator is about how supply and demand changes move prices and quantities. The grades 9-12 indicator with the same number asks students to generate possible explanations for a government role in markets when market inefficiencies exist.
In which grade is D2.Eco.6.6-8 taught?
It depends on the school. The C3 Framework sets indicators for the end of grade 8, so this one may appear in a grade 6, 7 or 8 social studies course, often in an economics unit or alongside world history units on medieval Europe.
What is a good quick check for D2.Eco.6.6-8?
Give students one new event in each of the four markets and ask them to name the change (supply or demand, up or down) and its effect on price and quantity. Students who get the direction right for wages, interest rates and exchange rates, not only goods, are meeting the indicator.
07
Related Standards
5 standards
These standards connect to D2.Eco.6.6-8: prerequisites to review first, parallel standards at the same level, and next steps that build on it.
Before this lesson
D2.Eco.3.6-8Prerequisite
Explain the roles of buyers and sellers in product, labor and financial markets
Standard text: National Council for the Social Studies (NCSS), The College, Career, and Civic Life (C3) Framework for Social Studies State Standards: Guidance for Enhancing the Rigor of K-12 Civics, Economics, Geography, and History (Silver Spring, MD: NCSS, 2013). NCSS was not involved in the production of this lesson and does not endorse it.
