Civics and Economics

Chapters 18, 19, and 26.2 Vocabulary

Chapter 18
Word Definition
SECTION 1
needs things that are required for survival
wants things that we would like to have
the study of how we make decisions in a world in which
economics
resources are limited.
the behavior and decision making of small units such as
microeconomics
individuals and businesses
deals with the economy as a whole and decision making by
macroeconomics large units such as governments or whole industries or
societies.
economic model a theory that tries to explain human economic behavior.
way of producing the things a countries people want and
economic system
need.
resources the things used in making goods and providing services.
occurs whenever we do not have enough resources to
scarcity
produce all the things we would like to have.
SECTION 2
the alternative you face if you decide to do one thing rather
trade-off
than another
the cost of the next best use of your time or money when
opportunity cost
you choose to do one thing rather than another.
marginal cost the additional cost of producing one additional unit of output.
the additional satisfaction or benefit received when one more
marginal benefit
unit is produced.
economic model that compares the marginal costs and
cost-benefit analysis
marginal benefits of a decision.
 Chapter 19
Word Definition
SECTION 1
goods tangible products that we use to satisfy our wants and needs
services work performed for someone else
factors of production resources necessary to produce goods and services
natural resources “gifts of nature” that make production possible.
the nations workforce; anyone who works to produce goods
labor
and services.
the manufactured goods used to make other goods and
capital
services
an individual who starts a new business, introduces new
entrepreneur
products, and improves processes.
Gross Domestic the total value, in dollars, of all the final goods and services
Product (GDP) produced in a country during a single year.
the quality of life based on the possession of necessities and
standard of living
luxuries that make life easier.
SECTION 2
the free and willing exchange of goods and services between
market
buyers and sellers.
the markets where productive resources are bought and
factor markets
sold.
product markets markets where producers offer goods and services for sale.
a measure of the amount of output produced by a given level
productivity
of inputs in a specific period of time.
takes place when people, businesses, regions, or even
specialization countries concentrate on goods or services that they can
produce better than anyone else.
breaking down a job into small tasks performed by different
division of labor
workers.
economic where we rely on others, and others rely on us, to provide
interdependence goods and services.
SECTION 3
an economic system in which private citizens own and use
capitalism
the factors of production in order to seek a profit.
free enterprise another term to describe the American economy.
consumer describes the consumer as the “king”, or ruler, of the market,
sovereignty the one who determines what products will be produced.
rights that show that we have the freedom to own and use,
private property
or dispose of, or throw away, our own property as we choose
rights
as long as we do not interfere with the rights of others.
the struggle between buyers and sellers to get the best
competition
products at the lowest prices.
the amount of money left over after all the costs of
profit
production have been paid.
the driving force that encourages individuals and
profit motive
organizations to improve their material well-being.
the act of buyers and sellers freely and willingly engaging in
voluntary exchange
market transactions
laissez-faire
a French term that means “to let alone”.
economics
 Chapter 26
Word Definition
SECTION 2
the decisions are made in free markets based on the
market economy
interaction of supply and demand.
Per capita GDP the total GDP divided by the country’s population.
the opposite of a market economy; an economic system in
command economy which the major economic decisions are made by the central
government.
the belief that the means of production should be owned and
socialism controlled by society, either directly or through the
government.
economic system in which the central government directs all
communism
major economic decisions.
individuals carry on their economic affairs freely, but are
mixed economy
subjected to some government intervention.