EOC Review Civics and Economics Economics Basics & Types of Economies

1. EOC Review Civics and Economics Economics Basics & Types of Economies Civics and Economics EOC Review

2. What is Economics? Civics and Economics EOC Review

3. The study of how we make decisions in a world where resources are limited. Civics and Economics EOC Review

4. What is scarcity? • What is an example of something that is scarce? Civics and Economics EOC Review

5. Scarcity occurs when we do not have enough resources to produce all the things we would like to have. • Examples? Civics and Economics EOC Review

6. What are needs? • What are wants? Civics and Economics EOC Review

7. Needs are required for survival. • Wants are things we would like to have. Civics and Economics EOC Review

8. What is an economic model? Civics and Economics EOC Review

9. An economic model is a representation of the real world that is used to explain how the economy works or to predict what might happen if the economy changes. Civics and Economics EOC Review

10. What is a trade-off? Civics and Economics EOC Review

11. Tradeoff- • Alternative you face if you decide to do one thing rather than another. Civics and Economics EOC Review

12. What is opportunity cost? • What may be an example? Civics and Economics EOC Review

13. Opportunity cost is the cost of the next best use of your time or money. • Examples? Civics and Economics EOC Review

14. What types of costs do businesses incur? Civics and Economics EOC Review

15. Fixed Costs- • The same no matter how many units produced. • Variable Costs- • Expense that changes with the number of units produced. Civics and Economics EOC Review

16. Total Cost • Fixed + Variable = TOTAL • Marginal Costs • Extra, additional cost of producing one additional unit of output. Civics and Economics EOC Review

17. What is revenue? Civics and Economics EOC Review

18. Revenue is money coming in. Civics and Economics EOC Review

19. What is the cost benefit analysis? Civics and Economics EOC Review

20. It compares marginal costs with marginal benefits of a decision. • Which do you want to be higher? Cost or benefit? Civics and Economics EOC Review

21. What is a market economy? Civics and Economics EOC Review

22. An economic system where supply, demand, and prices help people make economic decisions. Civics and Economics EOC Review

23. What is capitalism? • What is free enterprise? Civics and Economics EOC Review

24. Capitalism- • A system where private citizens own most, if not all, of the means of production. • Free Enterprise- • Businesses are allowed to compete for a profit with minimum government interference. Civics and Economics EOC Review

25. What are incentives? Civics and Economics EOC Review

26. Rewards offered to try and persuade people to take certain economic actions. Civics and Economics EOC Review

27. What are the 4 Factors of Production? Civics and Economics EOC Review

28. Natural Resources- • “gifts of nature” • Labor- • Both physical and mental. • Capital- • Tools used to make other products • Entrepreneurship- • Individuals that start new businesses, introduce new product and improve management techniques. Civics and Economics EOC Review

29. What are goods? • What are services? Civics and Economics EOC Review

30. Goods- tangible products • Services- work done for someone else Civics and Economics EOC Review

31. What is Gross Domestic Product? Civics and Economics EOC Review

32. GDP; total value in $ of all the final goods and services produced in a country. • What is a final good? Civics and Economics EOC Review

33. What is the difference between product and factor markets? Civics and Economics EOC Review

34. Product markets- • Where producers offer goods and services for sale. • Consumers spend their income here. • Factor markets- • Where resources are being bought and sold. • Consumers earn their income here. Civics and Economics EOC Review

35. What is productivity? • What is the division of labor? Civics and Economics EOC Review

36. Productivity- when scarce resources are used efficiently. • Division of labor- breaking down of job into smaller parts. • Becoming specialized. Civics and Economics EOC Review

37. Consumer sovereignty refers to what? Civics and Economics EOC Review

38. The consumer is “king” or ruler of the market. Civics and Economics EOC Review

39. What is competition? • What is the profit motive? Civics and Economics EOC Review

40. Competition- • Struggle between buyers and sellers to get the best products at the lowest price. • Profit motive- • driving force that encourages people to improve their material well being. Civics and Economics EOC Review

41. Who was Adam Smith? What were his economic philosophies based on? Civics and Economics EOC Review

42. Scottish economist and philosopher. • Adam Smith wrote Wealth of Nations. • Laissez-faire economics- government should not interfere in the market place. Civics and Economics EOC Review

43. Who are consumers? Civics and Economics EOC Review

44. We are all consumers. Civics and Economics EOC Review

45. What is disposable income? • Discretionary income? Civics and Economics EOC Review

46. Disposable income- • Money a person has left over after taxes paid on it. • Discretionary income- • Money left over after paying for necessities. • Can satisfy our wants. Civics and Economics EOC Review

47. What is interest? Civics and Economics EOC Review

48. Payment people receive when they lend money. Civics and Economics EOC Review

49. What are imports? • What are exports? Civics and Economics EOC Review

50. Import = good purchased from another country. • Export = good sold to another country Civics and Economics EOC Review