1. Economics EOC Review Goal 8 EOC Review

2. ECONOMIC SYSTEM CHARACTERISTICS TRADITIONAL ECONOMIES An economic system where what is produced is based solely on the needs of the small community. COMMAND ECONOMIES An economic system in which the government controls all aspects of the production and consumption. MARKET ECONOMY aka Capitalism Adam Smith wrote “The Wealth of Nations” An economic system in which the government plays no role, and what is produced is based solely on what is in demand. MIXED ECONOMIES An economic system which the government is deeply involved in economic decisions through its role of regulator, consumer, subsidizer, taxer, employer, and borrower.

3. GOAL 8: Features of the United States Economic System Objective 8.02: Free Market Enterprise, Private Ownership, and Individual Initiative How does the 5 th amendment protect property ownership? Patents &copyrights- Copyright- the exclusive right to control, publish, and sell an original work. Patent- a license issued to an inventor granting the exclusive right to manufactor

4. MARKETWHAT HAPPENS IN THE MARKET Product Market Markets where producers offers goods and services for sale. Factor Market The Markets where productive resources are bought and sold.

5. Objective 8.04: Supply, Demand, and Prices How are supply, demand, and prices related? They all affect each other. List the factors that effect demand. Ability to make a product Do people want the product? Supply List the factors that effect supply. Ability of enough of a product to make it to market- demand How do substitutes and complements affect supply and demand? They can help or hurt supply and demand.

6. TERMDEFINITIONWHAT HAPPENS TO PRICES SurplusToo much productThey fall ShortageNot enough products to meet demand. Price set below equilibrium price They increase

7. When supply and demand are equal, we have an _Equilibrium_ price. What is a price ceiling? The maximum price a consumer will pay for a product What is a price floor? The lowest a product can be sold and make a product. What effect does inflation have on prices? It causes prices to rise What effect does deflation have on prices? It causes prices to drop.

8. Objective 8.06: Competition, Price, Supply Why is competition important in our economy? It helps to keep prices down. How do consumers benefit from competition in markets? Competition helps to bring good products and good prices for those products Define monopoly: When the market creates a sole provider for a good or service. How does a monopoly hurt the consumer? It means there is no competition. They are required to pay whatever the seller asks for the product.

9. TYPE OF BUSINESS DEFINITIONADVANTAGESDISADVANTAGES Sole Proprietorship A business owned and operated by a single person Pride in owning the business, receives all the profits Unlimited liability or complete legal responsibility for all debts and damages PartnershipsA business owned by two or more people Pride of sharing ownership in a business The legal structure is complex CorporationsType of business organization and by many people but treated by law as if it is owned by one person The ease of raising financial capital Expensive and complex to set up

10. Fiscal policy Changes in government spending or tax policies Monetary policy The government itself can go very little to prevent inflation results from monetary policy decisions Banking system By providing loans to businesses and consumers to make purchases to stimulate the economy Types of Insurance IGNORE THIS QUESTION.

11. Objective 8.09: Role of Money List 3 reasons why money is important in our economic system. Serves as a form of exchange- trade money for goods and services Money serves as a store of value. Money serves as a measure of value