1. Week 1 Activity 2

3. Traditional (Subsistence) Economy – Goods and services are produced by a family for their personal consumption. Little surplus and little exchange of goods. Only a limited need for markets (places to buy and sell goods and services). Found in less developed nations of the world, usually in rural areas. Most less developed nations today are a mix of traditional and either market or command economies.

4. Command (aka. “planned”) Economy - decisions about what and how much to produce, where to locate economic activities, and what prices to charge for goods and services are made by a single, central government agency or authority. Economic decisions are often made to further social goals. Two Examples – Communism – Central Government owns means of production – they plan and make everything under their direction. Socialism – Central government does not own means of production but regulates and guides the production, distribution, and price of items in the marketplace (according to social goals).

5. In a subsistence economic system, small-scale production of goods for sale in markets is termed cottage industry. It usually involves producing a good by hand or with low technology at home or in a small village cooperative.

6. Free Market Economies What is produced, how it is produced, and for whom it is produced are all decided by the marketplace. Goods in a free market (free enterprise) system are produced and sold based on what the market demands. Price of goods is dependent on the forces of supply and demand. Producers specialize in providing the goods that they can produce most profitably (ie. where they can make the most money).

7. In order to measure and record information/data about nations and their economies, we must collect a set of demographic data. Demographics are things that tell us about people – age, gender, health, etc. This means we look at things like: Average Birth Rate – How Many born, on average, to each mother? Average Life Expectancy – How long does the average person live to be? Infant Mortality Rate – What percentage of babies born will die within a year? Five years? Population Density (People living per square mile) Gross Domestic Product Per Capita – The total economic output of a country divided by its population Average Annual Income – How much money does the average person make? Many … Many … Many more indicators can be used.

8. Standard of living is a function of the level of development in a country, measured by factors such as the amount of personal income, levels of education, food consumption, life expectancy, availability of health care, ways natural resources are used, level of technology, and others.

9. Developed Nations – Countries with higher levels of wealth, material well being, and standards of living. Usually signified by: Higher GDP per capita Lower birth rate Higher Average Life Expectancy Higher Literacy Rate Lower Infant Mortality Rate Developing Nations –Nations where the average income is much lower than in industrial nations. Economy usually centers round one or a very few export goods, depends greatly on manual labor, lower levels of education and technology, and low standards of living. Usually signified by: Lower GDP per capita Higher Birth Rate Lower Average Life Expectancy Lower Literacy Rate Higher Infant Mortality Rate

10. Click below to view Economic Development Statistics Website at Found at: http://commons.wikimedia.org/wiki/User:Sbw01fhttp://commons.wikimedia.org/wiki/User:Sbw01f

11. What do you think the standard of living would be (high or low) for each of the following sets of data? COUNTRY #1 DemographicData Average Life Expectancy 78.11 years Fertility Rate (Average Birth Rate) 2.05 Per Capita GDP $46,400 US Dollars Literacy Rate at Age 15 99% Infant Mortality Rate 6.14 deaths per thousand births COUNTRY #2 DemographicData Average Life Expectancy 60.63 Years Fertility Rate (Average Birth Rate) 2.65 Per Capita GDP $1,600 US Dollars Literacy Rate at Age 15 47.9% Infant Mortality Rate 57.78 deaths per thousand births

12. How do you define wealth? Do you consider the United States a wealthy nation compared to other nations? Why/why not? Give specific examples to back up your answer.