Download Civics Core 100, Goal 8

Civics Core 100, Goal 8
The learner will analyze
features of the economic
system of the United States.
 Decisions
are made in free markets
based on the interaction of supply
and demand
 AKA : capitalism
 Private citizens own the factors of
production
 Individuals
carry on their economic
affairs freely, but are subject to some
government REGULATION.
 Opposite
of Market Economy
 The individual has little, if any
influence over how the basic
economy functions
 The government tells produces what
to do
 Belief
that the means of production
should be owned and controlled by
society
 Government owns the major factors
of production but PRIVATE ownership
of small businesses
 Economies
based on custom or habit
 Traditional methods and materials
are used to make items in this
economy
 The
money a
business
receives for its
products or
services above
its costs
 Primary purpose
of business
 The
struggle that goes on between
buyers and sellers to get the best
products at the lowest prices
 WHAT
to produce?
 HOW to produce?
 FOR WHOM to produce?
 Coins
and paper money
 Money doesn’t have value by itself
– The have value only because we accept
that they have value
 Various
quantities of a good or
service that producers are willing to
sell at all possible market prices
 Opposite of demand
 The higher the price, the more
producers will be willing to make.
The lower the price, the fewer items
they want to make
 Desire,
willingness, and ability to buy
a good or service
 The higher the price the fewer
consumers with purchase. The lower
the price, the more consumers will
buy.

Substitutes: Competing
products b/c consumers
can choose one over
the other
– Change in price in one
good, causes the demand
of other to change in
same direction
– Price in good A goes up,
the demand for good B
goes up
– Price in good A goes
down, demand for B goes
down.

Complementary:
products that are
used together
– Demand for one
good moves in
opposite direction as
the price for the
other
– Price of Good A goes
up, Demand for
Good B goes down
 Amount
by which the quantity
supplied is higher than the quantity
demanded
 Price is too high
 Consumers are unwilling to pay the
price
 Will lead to needing to lower
prices(sales)
 Amount
by which quantity demanded
is higher than quantity supplied
 Price is too low
 Suppliers are unwilling to sell their
goods or services in large enough
numbers to meet demand
 Supply
and demand are balanced at
this point
 There is neither surplus nor a
shortage
Sole Proprietorships: most common type;
business owned and operated by a single
person
 Partnerships: business that 2 or more
people own and operate
 Corporation: organized business
recognized under law that has many of the
rights and responsibilities as citizens

– own property, pay taxes, sue or be sued
 When
one purchases stock in a
company, that is all they can lose if
the company goes out of business.
 An advantage for corporations in
gaining investments from individuals.
 Less risk for investors than owning
own business