2Economythe production, consumption, and distribution of goods and services
3Private vs. Public Businesses Public means it is owned by the governmentPrivate means it is owned by citizens
4Market EconomyAn economy where private citizens or groups of citizens own businesses.Citizens are free to develop many different types of businesses, so people have a wide variety of jobs, goods, and servicesBecause people in a market economy are free to choose how to make and spend their money
5Command EconomyAn economy where the government owns the country’s resources and businesses.The government decides what goods should be produced and what services will be available.Seriously limits citizen’s choices of jobs, goods, and services.
6Traditional EconomyAn economy where people use the same work methods and tools generation after generation.Citizens do not have enough goods to have a surplus (more than they need), so they cannot earn extra money to buy better equipment.Without better equipment, they continue to work in the same way, never changing their methods.
7Mixed Economy A mix of different economic systems Some businesses are government owned and others are privately owned by citizens
8Trade Barrier Barrier=wall Something that prevents trade Examples: TariffQuotaEmbargoGeography (geography that prevents easy trade, like mountains, oceans, etc.)
9EmbargoA government order prohibiting the movement of merchant ships/planes/trading into or out of its ports.A government restriction on trade with a foreign nation.
10Quota The amount of something that is allowed or admitted Examples: A restriction on the quantity (number) of a good that can be imported during a specific time period would be called an “import quota”.If the United States government only allows 50 tons of corn to be imported into the US each year, this would also be called an “import quota”.If your teacher has given you 20 minutes to work on an assignment, your “time quota” is 20 minutes.
11More QUOTA examplesMoney Quota: Your parents give you $20 a week to spend. Once you spend all $20, you have met your “money quota”. You will not receive any more money until next week.Paper Quota: Your job only allows you to use 1,000 sheets of paper per year. If you use all 1,000 sheets, then you have met your “paper quota”. You will not receive any more paper until next year.
12Tariffa tax that the government puts on imported or exported goods.
13Entrepreneur/Entrepreneurship When a person organizes and manages a business.Are willing to risk everything for the possibility of gaining a profit
14Capital Good/Resource The things needed to make other goodsExamples:MachinesIce machineCoin pressFactoriesA car manufacturing plantTechnologyComputersSoftware
15Human Capital/Resource The skills that humans have to build things or perform services.Examples:A worker in a factoryA hair stylistAn actorWaiter/waitressA person who mows lawns
16International TradeThe sale of goods or services across country bordersTrade between different countries
17Voluntary TradeSame as international trade, but the countries both benefit from trade and they voluntarily decide to trade with one another
18Currency Something you exchange for goods or services The money in circulation in any country
19Gross Domestic Product (GDP) The total value of all the goods and services produced in a country in a year.Often an indicator of Standard of Living (just like the literacy rate)…it’s like a big (imaginary) calculator that keeps track of all the money spent in a country in a year.
20Top 5 highest GDPs on Earth YEAR 20101 European Union $14,820,000,000,0002 United States $14,660,000,000,0003 China $10,090,000,000,0004 Japan $4,310,000,000,0005 India $4,060,000,000,000
21Bottom 5 lowest GDPs on Earth YEAR 2010223 Tuvalu $36,000,000224 Montserrat $29,000,000225 Tristan da Cunha $18,000,000226 Niue $10,010,000227 Tokelau $1,500,000
22GDP per capitaWhen you take the GDP and divide it by the population of that country.Is a more accurate picture of how much $$ a country has compared to the GDP
23Top 5 highest GDPs per capita YEAR 20101 Qatar $179,0002 Liechtenstein $141,1003 Luxembourg $82,6004 Bermuda $69,9005 Singapore $62,100*USA is # 47 with $47,200
24Bottom 5 lowest GDPs per capita YEAR 2010223 Eritrea $600224 Zimbabwe $500225 Liberia $500226 Democratic Republic of the Congo $300227 Burundi $300*All in Africa