<<

HISTORY AND SOCIAL STANDARDS OF LEARNING CURRICULUM FRAMEWORK 2008 (NEW) : Interaction Reformatted version created by SOLpass www.solpass.org of supply and demand determines . Civics and Demand is the amount of a good or that are CE.11 Study Guide willing and able to buy at a certain price. Supply is the amount of a good or service that producers are willing and able to sell at a STANDARD CE.11A certain price. -- TERMS is the combining of human, natural, , and to make or provide , resources, choice, opportunity services. Resources available and preferences cost, price, incentives, supply and demand, determine what is produced. production, and Consumption is the using of . Consumer preferences and price determine what is People make choices about how to use limited resources, purchased and consumed. decide the of resources, and structure markets for the of goods and services. How do people deal with scarcity, resources, choice, STANDARD CE.11B , price, incentives, supply and demand, production, and consumption? -- ECONOMIC Scarcity is the inability to satisfy all wants at the same Traditional, , command, and time. All resources and goods are limited. This requires that choices be made. mixed Resources are that are used in the Every country must develop an economic to production of goods and services. Types of resources are determine how to use its limited productive resources. natural, human, capital, and entrepreneurship. The key factor in determining the type of a Choice is selection of an item or action from a set of country has is the extent of involvement. possible alternatives. must choose or make What are the basic economic questions all must decisions about desired goods and services because these answer? goods and services are limited. How does each type of economy answer the three basic Opportunity cost is what is given up when a choice is questions? made—i.e., the highest valued alternative is forgone. The three basic questions of economics Individuals must consider the of what is given up • What will be produced? when making a choice. • Who will produce it? Price is the amount of exchanged for a good or service. Interaction of supply and demand determines • For whom will it be produced? price. Price determines who acquires goods and services. Each type of economy answers the three basic questions Incentives are things that incite or motivate. Incentives differently. are used to change economic behavior. What are the basic characteristics of traditional, free market, command, and mixed economies? Characteristics of major economic systems • No country relies exclusively on markets to deal with the of scarcity. • Economic decisions are based on custom and historical precedent. • People often perform the same type of as their parents and grandparents, regardless of ability or STANDARD CE.11C potential. -- U.S. ECONOMY Characteristics of the economy, including , private , , and The United States economy is primarily a free ; but because there is some government involvement it is characterized as a . Government intervenes in a market economy when the perceived benefits of a government policy outweigh the anticipated costs. Free market economy • Private ownership of property/resources What are the essential characteristics of the United States economy? • Profit motive Characteristics of the United States economy • Competition • Markets are generally allowed to operate without • undue interference from the government. are determined by supply and demand as buyers and • choice sellers interact in the marketplace. • Minimal government involvement in the economy • : Individuals and have Command economy the right to own real and as well as • Central ownership (usually by government) of the without undue interference property/resources from the government. • Centrally- • Profit: Profit consists of earnings after all expenses • Lack of have been paid. Mixed economy • Competition: between producers and/or • Individuals and businesses are owners and decision between sellers of a good or service usually results in makers for the private sector. better quality goods and services at lower prices. • Government is owner and decision maker for the • Consumer sovereignty: Consumers determine . through purchases what goods and services will be produced. Government involvement in the economy • Government’s role is greater than in a free market is limited. Most decisions regarding the production of economy and less than in a command economy. goods and services are made in the private sector. • Most economies today, including the United States, are mixed economies.