What every student should know to pass the Civics & Economics EOC Civics & Economics Top 100 What every student should know to pass the Civics & Economics EOC Goal 7

Goal 7: The learner will investigate how and why individuals and groups make economic choices.

Factors of Production Resources necessary to produce goods and services The four factors of production are natural resources, labor, capital, and entrepreneurs.

Natural Resources Gifts of nature that make production possible

Labor Human effort directed toward producing goods and services

Capital Previously manufactured goods used to make other goods and services

Entrepreneurs Individuals who start new businesses, introduce new products, and improve management techniques

Scarcity Not having enough resources to produce all of the goods and services we would like to have

Trade-offs The alternative you face if you decide to do one thing rather than another

Opportunity Costs The cost of the next best alternative use of time and money when choosing to do one thing rather than another

Law of Diminishing Returns The tendency for a continuing application of effort or skill toward a particular project or goal to decline in effectiveness after a certain level of result has been achieved.

Marginal Utility The additional satisfaction a consumer gains from consuming one more unit of a good or service.

Productivity The degree to which resources are being used efficiently to produce goods and services

Specialization When people, businesses, regions and/or nations concentrate on goods and services that they can produce better than anyone else

Division of Labor The breaking down of a job into separate, smaller tasks to be performed individually

Needs Requirements for survival, such as food, clothing, and shelter

Wants Things we would like to have, such as entertainment, vacations, and items that make life comfortable and enjoyable

Cost-Benefit Analysis Economic model that compares the marginal costs and marginal benefits of a decision

Command Economy An economic system in which the major economic decisions are made by the central government

Market Economy An economic system in which individuals own the factors of production and make economic decisions through free interaction

Mixed Economy An economic system combining the characteristics of more than one type of economy

Traditional Economy An economic system in which the decisions of what, how, and for whom to produce are based on custom or habit