Civics Core 100, Goal 7

1. Civics Core 100, Goal 7 Goal 7: The learner will investigate how and why individuals and groups make economic choices.

2. Factors of Production

3. ______ __ _________ • CELL: • Capital: manufactured goods used to make other goods and services- sometimes in economics it refers to $ • Machines, buildings, tools • Entrepreneurship: individual who starts a new business, introduces a new product, and improves processes • Land: AKA Natural Resources: actual service land and water as well as fish, animals, forests, and mineral deposits • Labor: human resources; anyone who works to produce goods and services

4. Wants and Needs

5. ____ • Needs: required for survival • Food, clothing, shelter

6. ____ • Wants: things we would like to have • Entertainment, vacations, items that make life comfortable and enjoyable

7. Scarcity

8. _______ • Occurs whenever we do not have enough resources to produce all of the things we would like to have (wants) • No country has all of the resources it needs, therefore, resources are limited • Wants = unlimited, Resources = limited • Because of this, all societies must answer 3 questions: THE THREE BASIC ECONOMIC QUESTIONS • WHAT to produce? • HOW to produce? • FOR WHOM to produce?

9. Trade Offs

10. ____ ___ • Alternative you face if you decide to do one thing rather than another. • Not only about decisions involving money • Example: choosing a Pepsi over a Coke would be a trade off

11. Opportunity Costs

12. __________ ____ • Cost of the next best use of your time or money when you choose to do one thing rather than another • Cost= more than just money (involves all of the possible discomforts and inconveniences linked to the choice) • When you make a trade-off, you lose something • Example: Choosing to go to the movies instead of the football game. The opportunity cost could be the excitement of the game, the interaction with friends, and maybe money.

13. Specialization

14. _____________ • Takes place when people, businesses, regions, or even countriesconcentrate on goods or services that they can produce better than anyone else • Nearly everyone demands on others to produce things to consume

15. Decision Making / Cost-Benefit Analysis

16. Decision Making Grid • PACED • Identify the Problem • List Alternatives • State your Criteria • Evaluate Alternatives • Decision!

17. ___ ______ _______ • Comparing the marginalbenefit against the marginalcosts • If the costs outweigh the benefits, we should reject the chosen option

18. Productivity: Methods of Increasing

19. ___________ ______ __ _________ • Productivity: Efficient use of resources • Measure of the amount of output produced by a given level of inputs in a specific period of time • Productivity more output can be produced with the same amount of input in the same amount of time

20. ___________ ______ __ _________ • Specialization • Division of Labor- assembly lines • Investment in human resources- train your employees • Investment in capital resources- improve the equipment used, example: computers.

21. Resources

22. ________ • The things used in making goods and providing services • Tools, people (human resources), wood, soil, and water (natural resources)

23. Division of Labor

24. _______ __ ____ • Breaking down a job into small tasks performed by different workers • Makes use of differences in skills and abilities • Improves productivity

25. Laissez - Faire

26. ______ ____ • French for “let it alone” • Government should not interfere in the marketplace. • Government’s role is confined to those actions necessary to ensure free competition