Delvon Randall period 5 European economics 20% New Grade 100%
Vocabulary
Economics- The study of the making, buying, and selling of goods or services
Services- Any kind of work performed for others
Goods- Something you can feel
Supply- What is available for sale
Demand- (Wanted) by customers
Scarcity- There are limited resources, not enough for everyone
Producers- Anyone who makes or grows a good or service
Consumers- Anyone who buys a good or service
Specialization- When an individual or a company specializes in doing one part of a task and relies on other to complete the other parts
Interdependence- When people depend on one another. Specialization results in interdependence Specialization encourages trade between countries because they become dependent upon one another's products to complete their own products
Entrepreneur- A person who comes up with a product or service, or a better way to produce one
Traditional Economy
What to produce? People follow their customs and make what their ancestors made
How to produce? Government decides how to make goods/Services
For whom to produce? People in the village who need it
Barter- To trade one thing for another
Command Economy
What to produce? Government makes all economic decisions
How to produce? Government decides how to make goods/services
For whom to produce? Whomever the government decides to give them to
Communist Countries- Have command economies
Market economy
What to produce ? Businesses base decisions on supply and demand and free enterprise (PRICE)
How to produce? Businesses, decide how to produce goods
For whom to produce? consumers
Mixed Economy - Command + Market = Mixed
What to produce? Businesses
How to produce? Businesses, but the government regulates certain industries
For whom to produce? Consumers
Mixed economic systems are on a continuum with some being closer to a command economy like Russia or closer to a market economy like the united states
Factors of production
Human Capital - All the talents, skills, knowledge a person has
Capital Resources- goods and that make other goods or services
Natural Resources- resources from the earth
Entrepreneur- create a product or own a business
Trade barriers- Things that hinder or get in the way of trade
Physical- Mountains, rivers, oceans,deserts...
Cultural- Language, currency (money), or beliefs. Countries need an exchange system for currency (money) so they can trade with one another.
Economic- government rules that hinder, block or discourage free trade
Tariff- Tax on imports
Quota- Specific limit placed on the number of imports
Embargo- Complete trade block
Gross Domestic Product GDP
Total amount of final goods and services produced in one year within a county
Gross- All of something Domestic- within a country
The more a country invest in human capital and capital goods the more products a country makes which increases a countries GDP
The more natural resources a country has the more products they can make at a cheaper price
The more entrepreneurs a country has the more products they can spend more money which increases the GDP
Comparing of European country United Kingdom, Germany, Russia
Germany and the United kingdom are both directly in the middle of command and market they are a mixed economy but Russia is more a command then a market but still a mixed economy. the reason that Russia is closer is because it was command for so long its trying to transition
Economic Scenarios
Traditional- Kodak Yellow's father was a fisher man. he is now a fisher man to and his wife grows spices
Command- Devante wants to open a store nut he cant because the government makes all the rules and stores
Market- Ronald McDonald wants to open a nuclear bomb store. He does and sells at whatever price he wants and the government cant say anything about it
Mixed- Miguel wants to open a atomic bomb store the government rejects this idea because it can kill people and recommends opening a pillow store.