Civics Core 100, Civics Core 100, Goal 7Goal 7

Goal 7: The learner will Goal 7: The learner will investigate how and why investigate how and why

individuals and groups make individuals and groups make economic choices. economic choices.

CELLCELL:: CCapitalapital: manufactured goods used to make other : manufactured goods used to make other

goods and services- sometimes in economics it refers goods and services- sometimes in economics it refers to $to $ Machines, buildings, toolsMachines, buildings, tools

EEntrepreneurshipntrepreneurship: individual who starts a new : individual who starts a new business, introduces a new product, and improves business, introduces a new product, and improves processesprocesses

LLandand: AKA Natural Resources: actual service land : AKA Natural Resources: actual service land and water as well as fish, animals, forests, and and water as well as fish, animals, forests, and mineral depositsmineral deposits

LLaborabor: human resources; anyone who works to : human resources; anyone who works to produce goods and servicesproduce goods and services

NeedsNeeds: required for survival: required for survival Food, clothing, shelterFood, clothing, shelter

WantsWants: things we would like to have: things we would like to have Entertainment, vacations, items that Entertainment, vacations, items that

make life comfortable and enjoyablemake life comfortable and enjoyable

Occurs whenever we do not have enough Occurs whenever we do not have enough resourcesresources to produce all of the things we would to produce all of the things we would like to have (like to have (wantswants))

No country has No country has allall of the resources it needs, of the resources it needs, therefore, resources are limitedtherefore, resources are limited

Wants = Wants = unlimitedunlimited, Resources = , Resources = limitedlimited Because of this, all societies must answer 3 Because of this, all societies must answer 3

questions: THE THREE BASIC ECONOMIC questions: THE THREE BASIC ECONOMIC QUESTIONSQUESTIONS WHATWHAT to produce? to produce? HOWHOW to produce? to produce? FOR WHOMFOR WHOM to produce? to produce?

AlternativeAlternative you face if you decide to you face if you decide to do one thing rather than another.do one thing rather than another.

Not only about decisions involving Not only about decisions involving moneymoney

Example: choosing a Example: choosing a PepsiPepsi over a over a CokeCoke would be a trade off would be a trade off

CostCost of the next best use of your time or of the next best use of your time or money when you choose to do one thing money when you choose to do one thing rather than anotherrather than another

Cost= more than just Cost= more than just moneymoney (involves (involves allall of of the possible discomforts and the possible discomforts and inconveniences linked to the choice)inconveniences linked to the choice)

When you make a When you make a trade-offtrade-off, you lose , you lose somethingsomething

Example: Choosing to go to the movies Example: Choosing to go to the movies instead of the football game. The instead of the football game. The opportunity costopportunity cost could be the excitement of could be the excitement of the game, the interaction with friends, and the game, the interaction with friends, and maybe money.maybe money.

Takes place when Takes place when peoplepeople, , businesses, regions, or even businesses, regions, or even countriescountries concentrate on goods or concentrate on goods or services that they can produce services that they can produce better than anyone elsebetter than anyone else

Nearly everyone demands on others Nearly everyone demands on others to produce things to to produce things to consumeconsume

PACEDPACED Identify the Identify the PProblemroblem List List AAlternativeslternatives State your State your CCriteriariteria EEvaluatevaluate Alternatives Alternatives DDecisionecision!!

Comparing the Comparing the marginalmarginal benefitbenefit against the against the marginalmarginal costscosts

If the costs outweigh the benefits, If the costs outweigh the benefits, we should we should rejectreject the chosen option the chosen option

ProductivityProductivity: Efficient use of : Efficient use of resources resources

Measure of the amount of Measure of the amount of outputoutput produced by a given level of produced by a given level of inputsinputs in a specific period of in a specific period of timetime

Productivity more output can be Productivity more output can be produced with the same amount of produced with the same amount of input in the same amount of timeinput in the same amount of time

SpecializationSpecialization Division of Labor- Division of Labor- assembly linesassembly lines Investment in Investment in humanhuman resources- resources-

train your employeestrain your employees Investment in Investment in capitalcapital resources- resources-

improve the equipment used, improve the equipment used, example: computers.example: computers.

The things used in making The things used in making goodsgoods and providing and providing servicesservices Tools, people (human resources), wood, Tools, people (human resources), wood,

soil, and water (natural resources)soil, and water (natural resources)

Breaking down a job into small Breaking down a job into small taskstasks performed by different performed by different workersworkers

Makes use of differences in Makes use of differences in skillsskills and abilitiesand abilities

Improves Improves productivityproductivity

French for French for ““let it alonelet it alone”” GovernmentGovernment should not interfere in should not interfere in

the marketplace. the marketplace. GovernmentGovernment’’s role is confined to s role is confined to

those actions necessary to ensure those actions necessary to ensure free free competitioncompetition