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List of Benchmarks for Economics

Standard 3.Understands the concept of prices and the interaction of supply and demand in a market economy
  Level Pre-K (Grade Pre-K)
   1. Not appropriate for this level
  Level I (Grade K-2)
   1. Knows that a price is the amount of money that people pay when they buy a good or service
   2. Knows that a market exists whenever buyers and sellers exchange goods and services
  Level II (Grade 3-5)
   1. Knows that in any market there is one price (i.e., the equilibrium or market clearing price) that makes the amount buyers want to buy equal to the amount sellers want to sell  A 
   2. Understands that people buy less of a product when its price goes up and more when its price goes down
   3. Understands that businesses are willing and able to sell more of a product when its price goes up and less when its price goes down
   4. Understands that when consumers make purchases, goods and services are transferred from businesses to households in exchange for money payments, which are used in turn by businesses to pay for productive resources and to pay taxes
  Level III (Grade 6-8)
   1. Knows that relative prices refer to the price of one good or service compared to the prices of others goods and services
   2. Understands that relative prices and how they affect people’s decisions are the means by which a market system provides answers to the basic economic questions: What goods and services will be produced? How will they be produced? Who will buy them?
   3. Understands that the price of any one product is influenced by and also influences the prices of many other products
   4. Understands that scarce goods and services are allocated in a market economy through the influence of prices on production and consumption decisions  A 
   5. Understands the "law of demand" (i.e., an increase in the price of a good or service encourages people to look for substitutes, causing the quantity demanded to decrease, and vice versa)  A 
   6. Understands that an increase in the price of a good or service enables producers to cover higher costs and earn profits, causing the quantity supplied to increase (and vice versa), but that this relationship is true only as long as other factors influencing costs of product and supply do not change
  Level IV (Grade 9-12)
   1. Understands that the demand for a product will normally change (i.e., the demand curve will shift) if there is a change in consumers’ incomes, tastes, and preferences, or a change in the prices of related (i.e., complementary or substitute) products  A 
   2. Understands that the supply of a product will normally change (i.e., the supply curve will shift) if there is a change in technology, in prices of inputs, or in the prices of other products that could be made and sold by producers
   3. Understands that changes in supply or demand cause relative prices to change; in turn, buyers and sellers adjust their purchase and sales decisions  A 
   4. Understands that a shortage occurs when buyers want to purchase more than producers want to sell at the prevailing price, and a surplus occurs when producers want to sell more than buyers want to purchase at the prevailing price
   5. Understands that shortages or surpluses usually result in price changes for products in a market economy  A 
   6. Understands that when price controls are enforced, shortages and surpluses occur and create long-run allocation problems in the economy  A 

 A  = Assessment items available