1. Civics Core 100, Goal 8 The learner will analyze features of the economic system of the United States.

3.  Decisions are made in free markets based on the interaction of supply and demand  AKA : capitalism  Private citizens own the factors of production

4.  Individuals carry on their economic affairs freely, but are subject to some government REGULATION.

5.  Opposite of Market Economy  The individual has little, if any influence over how the basic economy functions  The government tells produces what to do

6.  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

7.  Economies based on custom or habit  Traditional methods and materials are used to make items in this economy

9.  The money a business receives for its products or services above its costs  Primary purpose of business

10.  The struggle that goes on between buyers and sellers to get the best products at the lowest prices

12.  WHAT to produce?  HOW to produce?  FOR WHOM to produce?

14.  Coins and paper money  Money doesn’t have value by itself –The have value only because we accept that they have value

16.  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

17.  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.

19.  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.

20.  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

22.  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)

23.  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

24.  Supply and demand are balanced at this point  There is neither surplus nor a shortage

28.  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

30.  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