Civics and Economics Final
Review
Ms. Ross
UNIT #1
1.What does e pluribus unum mean?
• Out of many, one.
List 3 examples of civic duties and
responsibilities:
• Civic Duty: required by law
– Attend school under 16
– Register for the draft
– Pay taxes
• Civic Responsibility: things that you should do
because it’s morally right
– attend school after 16
– Voting
– Recycle
Unit #5
Elections
• U.S. has a two-party system
– Main parties: Democrat and Republican
– Democrats: liberal on economic, social and
political issues; i.e. supporting gay marriage and
welfare programs
– Republicans: conservative on economic, social and
political issues; i.e. prolife, against gay marriage,
and excessive government programs such as
Medicaid and Medicare
Elections: Political Spectrum
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Reactionary
Conservative
Moderate
Liberal
Radical
Elections
• Electoral votes- depends on the population of the
state (Number of Representatives + 2 Senators)
• Recall Election- voters can oust an elected official
before his official term has ended
• National Convention- decides party platform and
presidential nominee
• Primary- chooses candidate for president
– Closed- only voters registered for a specific party can
vote for candidates for president
– Open- any registered voter can vote in any party's
primary
Unit #6
Types of Conflict Resolution
• Accommodating- self sacrificing; one person
yields to the others wants
• Avoiding
• Collaboration- working together to find a
solution
• Competing- aggressive individuals seek to put
pressure on other parties involved
• Compromising – coming up with a solution
that all parties are willing to accept
Consensus
• The idea of coming to an agreement
• Ex: a jury must come to an agreement in order
to convict the defendant
Law Influences
• Magna Carta
• 10 Commandments- First set of moral laws; right
vs. wrong
• Code of Hammurabi- First written code that
describe an “eye for an eye philosophy” for
punishment
• English Bill of Rights- Guaranteed basic rights for
Englishmen; directly influenced our Bill of Rights
• Mayflower Compact
Laws
• Precedent- an example set for others to follow
• Jurisprudence- the study of the science of the
law
• Criteria for Good Law must be:
– Fair- must treat each individual the same
– Reasonable- must be realistic
– Understandable- the average citizen can
comprehend the meaning
– Enforceable- must be able to be policed
Types of Laws
• Administrative- laws created by a government
agency
– Ex: airport security; bleeped words on the radio
• Statutory- laws created by the legislative
branch
– Ex: Voting Rights Act 1965
Jurisdiction
• Original Jurisdiction- the authority to be the
first to hear the case (District & Superior
Courts)
• Appellate Jurisdiction- the authority to review
a lower court decision (Appellate and
Supreme courts
• Exclusive Jurisdiction- case can only be heard
by a federal court (U.S District, Appellate, and
Supreme Court)
Unit #7
Factors of Production
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Land- oil and timber
Labor- renewable and non-renewable
Capital- physical vs. human
Entrepreneurship- RISK involved; Donald
Trump and Diddy
Wants vs. Needs
• Need-something necessary for survival
Ex: water, food, shelter
• Want- something desirable
– Iphone, Macbook
Goods vs. Services
• Goods- physical objects such as shoes and
shirts
• Services- actions or activities that one person
performs for another (haircuts, dental
checkups)
Scarcity
• Limited resources to meet unlimited wants
• All goods and services we produce are scarce!
• Scarcity limits supply and drives demand
Law of Diminishing Returns
• Productivity will increase to a point, then
begin to decrease
• Comparative Advantage- when a country
produces a good that is easy to make instead
of a good that is hard to make
– Ex: U.S. with corn, Saudi Arabia with oil
Trade Offs vs. Opportunity Cost
• Trade offs- everything you give up when you
make your decision
• Opportunity cost- the NEXT BEST thing you
give up. The opportunity you pass up to get
what you chose.
• Monetary Cost- The $$ amount of whatever
you choose
Production Possibility Frontier (PPF)
• A graph showing all possible ways we could
choose to distribute our resources in
production
Productivity
• How well resources are being used to produce
a good or service
• Output- something made/produced
• Input- something that is used to
make/produce an output
Complementary vs. Substitute
• Complementary good: two goods that are
usually consumed together (hot dogs and
buns)
• Substitute good: an acceptable replacement
for a good (Playstation vs. Xbox)
Fixed vs. Variable Cost
• Fixed cost- does not change when production
changes
– Ex: rent, salary
• Variable cost- changes when the level of
production changes
– Ex: electricity bill, worker wages
• Total cost= fixed cost + variable cost
Unit #8
Demand
• Demand- consumer’s willingness to buy an
item at various prices
• Law of Demand- consumers will buy more of a
product when prices are low and less when
prices are high
– P (price) goes up
– Q (quantity demanded) goes down
• Quantity Demanded- how much as consumer
will buy at a specific price
Reasons Demand can Change
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Income (More $, demand increases)
Pop. (More people buying, demand increases)
Bad Weather (demand decreases)
Complementary Goods
Substitute Goods
Expectations for the Future (If prices will ^,
demand increases)
• Style/Trends (demand decreases)
Supply
• Supply- the quantities of goods or services
that producers are willing to sell at all possible
market prices
• Quantity Supplied- the total amount or a good
or services produced at a specific price
• Law of Supply- as price rises for a good the
quantity supplied rises. As the price falls the
quantity supplied also falls.
Price Ceiling vs. Price Floor
• Ceiling- an artificial barrier that keeps the
prices from reaching the market clearing price
– Ex: price cap (gas)
– Creates shortage
• Floor- an artificial barrier that keeps the price
from falling to the market clearing prices
– Ex: minimum wage
– Creates a surplus
Economic Thinkers
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Adam Smith- Capitalist/Free Market Economy
Karl Marx- Command Economy
John Keynes- Mixed Economy
F.A. Hayek- Austrian School of Economic
Thought
Types of Economy
• Free market- economic freedom
– Laissez-faire- government should be hands off
– Invisible hand- will set the prices and quantity
– Competition and profit are good
• Command- economic equality
– Decisions made by the government
– Equal distribution of wealth
• Mixed- economic growth and stability
– Government should stay out unless there’s a
problem (market)
– Problems? Government should step in a fix it
(command)
The Basic Questions of Economics:
1. What is to be produced?
2. How are the goods to be produced?
3. For whom are the goods produced?
Types of Market Structures
• Bull Market- the average value of stocks is
going up
• Bear Market- the average value of stocks is
going down
Types of Businesses
Sole Proprietorship
•Description
▫1 person owns and operates the company
•Advantages
▫The owner makes ALL decisions and reaps ALL the
benefits
•Disadvantages
▫Unlimited Liability
•Examples- Girl’s lemonade stand, Shima’s
beauty salon
Partnership
•Description
▫2 or more people own and operate the company
•Advantages
▫Divide tasks among partners
▫Access different skills of partners
•Disadvantages
▫Share Profits
▫Unlimited liability
•Example- Doctors and Law offices
Corporation
•Description
▫A company divided into shares who are owned by
stockholders
•Advantages
▫Limited Liability
•Disadvantages
▫Double taxes
▫Gov’t regulations
•Examples- Disney, IBM, Microsoft, Nike, Apple
Franchise
•Description
▫A company that is individually owned but belongs to a
a parent corporation (sole-proprietorship &
Corporation)
•Advantages
▫Built-in reputation
▫Limited Liability
•Disadvantages
▫Loss of freedom & decision making
•Examples-the Panthers, McDonald’s, Five Guys
Burgers
Types of Liability
Unlimited liability: Risk extends beyond
your share in a company.
(you could lose EVERYTHING!)
•
•Limited Liability: Risk only involves
your share of the company.
Liability = Risk
Unit #9
The Business Cycle
Peak (Boom)
•Economy: Good
•Inflation: High
•Unemployment: Low (people have jobs)
Contraction (Recession)
•Economy: Declining
–(e.g. 6 months of decreasing GDP)
•Inflation: Falling
•Unemployment: Rising (people losing jobs)
The Business Cycle
Trough (Depression)
•Economy: Bad, GDP is low
•Inflation: Low (deflation)
•Unemployment: High (a lot of people don’t have jobs)
Expansion (Growth)
•Economy: Improving
•Inflation: Rising
•Unemployment: Falling (people getting jobs)
•Goal: CONTROLLED expansion…not too fast, not too slow
Fiscal vs. Monetary Policy
• Purpose: to ensure the economic expansions
and contractions are not too severe
• Fiscal Policy- actions congress can take
(spending, taxes, gov’t programs)
• Monetary Policy- controlled by the Federal
Reserve (amount of $, interest rates)
• Federal Reserve- central bank for U.S.
Economic Problem: Inflation
• Prices are high, people have too much money
and it’s not worth that much
• Fiscal Policy and Monetary Policy: Taxes
increase, gov’t spending decreases, welfare
decreases
• Tight policy
Economic Problem: Unemployment
• People don’t have enough money and aren’t
spending
• Fiscal Policy and Monetary Policy: taxes
decrease, gov’t spending increases, welfare
increases
• Contractionary policy
Economic Indicators
CPI- consumer price index - measures
inflation/deflation rates (price levels)
Unemployment rate- percentage of people without
a job
Gross Domestic Product - GDP- The value of
everything produced within a country in one year.
Per Capita GDP- how much every person on average
produced
GDP/population=per capita GDP
Globalization
• Migration-big groups of people moving from
one place to another.
• Out-sourcing- when companies move jobs
from one place to another to cut costs.
• NAFTA = North American Free Trade
Agreement
– Removed trade restrictions between U.S., Mexico
and Canada.