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.