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Civics & Economics
Unit 7: The Economy & the Individual
1) Capital: Tools, machinery, & $ used to make products
2) Capitalism: System in which private citizens own most, if not all, of the means of
production and decide how to use them within legislative limits
3) Competition: Struggle b/w buyers & sellers to get the best prices
4) Consumer: Someone who buys a good or service
5) Consumer Price Index: Measure of change in price over time of specific group of goods
& services
6) Consumer Sovereignty: Consumer determines what products are available
7) Cost-Benefit Analysis: Economic model that compares the marginal costs and marginal
benefits of a decision
8) Division of Labor: The breaking down of a job into separate, smaller tasks to be
performed individually
9) Economics: The study of how individuals and nations make choices about ways to use
scarce resources to fulfill their needs and wants
10) Economic Interdependence: A reliance on others, as they rely on you, to provide goods
& services to be consumed
11) Economic Model: Simplified representation of the real world that economists develop to
describe how the economy behaves and is expected to perform in the future
12) Economic System: Nation’s way of producing things its nation wants and needs
13) Entrepreneur: Individual who starts a new business, introduces a new product, and
improves a management technique
14) Fiscal Policy: The federal government’s use of spending and taxation policies to affect
overall business activity
15) Free Enterprise: Economic system in which individuals and businesses are allowed to
compete for profit with a minimum of government interference
16) Incentive: Reward offered to try to persuade people to take certain economic actions
17) Laissez Faire Economics: Economic system where government should not interfere in
the marketplace
18) Marginal Benefit: The additional or extra benefit associated with an action
19) Marginal Cost: Cost for adding one more unit
20) Marginal Utility: Additional use that is derived from each unit acquired
21) Market: Free and willing exchange of goods and services b/w buyers and sellers
22) Opportunity Cost: The cost of the next best alternative use of time and money when
choosing to do one thing rather than another
23) Productivity: The degree to which resources are being used efficiently to produce goods
and services
24) Profit Motive: The driving force that encourages individuals & organizations to improve
their wealth
25) Profit: The money a business receives for its products or services over and above its
costs
26) Resource: The money, people, & materials available to accomplish a community’s goals
27) Scarcity: Not having enough resources to produce all of the things we would like to have
28) Specialization: When people, businesses, regions, and/or nations concentrate on goods
and services that they can produce better than anyone else
29) Services: Work performed by a person for someone else
30) Trade-Off: The alternative you face if you decide to do one thing rather than another
31) Voluntary Exchange: Buyers & sellers choose to work together
Civics & Economics
Unit 8: The U.S. Economy
1) Articles of Partnership: Formal legal papers specifying the arrangement between
partners
2) Charter: A written document granting land and the authority to set up colonial
governments or a government document granting permission to organize a corporation
3) Cooperative: A voluntary association of people formed to carry on some kind of
economic activity that will benefit its members
4) Demand: Desire, willingness, and ability to buy a good or service
5) Demand Curve: Down-ward sloping curve that shows the quantities demanded at each
possible price
6) Demand Elasticity: Measure of responsiveness relating change in quantity demanded to
a change in price
7) Demand Schedule: Table showing quantities demanded at different possible prices
8) Equilibrium Price: The price at which the amount producers are willing to supply is
equal to the amount consumers are willing to buy
9) Factor Market: A market where productive resources are bought and sold
10) Financial Capital: Money used to buy the tools and equipment used in production
11) Law of Demand: The concept that people are normally willing to buy less of a product if
the price is high and more of it if the price is low
12) Law of Supply: The principle that suppliers will normally offer more for sale at higher
prices and less at lower prices
13) Marginal Utility: Additional use that is derived from each unit acquired
14) Market: Free and willing exchange of goods and services b/w buyers and sellers
15) Market Demand: The total demand of all consumers for a product or service
16) Market Supply: The total of all the supply schedules of all the businesses that provide
the same good or service
17) Minimum Wage: Lowest legal wage that can be paid to most U.S. workers
18) Price Ceiling: Maximum price that can be charged for goods & services, set by the
government
19) Price Floor: Minimum price that can be charged for goods & services, set by the
government
20) Product Market: A market where producers offer goods & services for sale
21) Shortage: Situation in which quantity demanded is greater than quantity supplied
22) Stock: Ownership share of a corporation
23) Stockholder: Individual who has invested in a corporation and owns some of its stock
24) Strike: When workers deliberately stop working in order to force an employer to give in
to their demands
25) Subsidy: A government payment to an individual, business, or group in exchange for
certain actions
26) Supply: The amount of goods and services that producers are able and willing to sell at
various prices during a specified time period
27) Supply Curve: Upward-sloping line that graphically shows the quantities supplied at
each possible price
28) Supply Elasticity: Responsiveness of quantity supplied to a change in price
29) Supply Schedule: Table showing quantities supplied at different possible prices
30) Surplus: Situation in which quantity supplied is greater than quantity demanded;
situation in which government spends less than it collects in revenues
31) Utility: The amount of satisfaction one gets from a good or service