Welcome! Please write in your agenda! You need to study for your assessment Friday!Warm-Up: What do you remember about these 3 economic questions? Describe how these questions are answered in traditional, command, and market economies.

Lets review economics! Traditional Economy Traditional Economy- Economic decisions are made based on custom & habit of how decisions were made in the past Command Economy Command Economy- Government planners make the economic decisions for workers Market Economy- Market Economy- Economic decisions are made by individuals, consumers & the market, who decide what to produce and what to buy. Mixed Economy Mixed Economy- Located on a continuum between pure market and pure command; most economies are located between the two types. Some individual freedom and some government control.

Voluntary Trade- Voluntary Trade- Two parties willingly exchange goods & services for their personal benefit Specialization- Specialization- Focus on producing goods & services that a country makes best/has a high demand for Trade Barriers- Trade Barriers- Anything that slows down or prevents one country from exchanging goods with another Tariff- Tariff- Tax on imports to protect the local economy Quota- Quota- Limit of imports brought into a country to protect a local economy Embargo- Embargo- Trade is completely ended as a protest or due to political issues

Human Capital- Human Capital- Knowledge and skills (education) of workers needed for producing a good or service Capital Goods- Capital Goods- Technology (factories, machines, & tools) used/needed for producing a good or service Gross Domestic Product (GDP)- Gross Domestic Product (GDP)- The total value of all goods & services of a country in a year Per capita GDP- Per capita GDP- The total value of a country per person Entrepreneurs- Entrepreneurs- People who are willing to take a risk to begin a new business and products

South African Economy: MIXED MOSTLY MARKET ECONOMY MIXED MOSTLY MARKET ECONOMY What to Produce? What to Produce? -GDP comes from mining (diamonds, platinum & gold), automobile assembly, services, and manufacturing(iron, steel, & machinery)  -South African government operates and maintains state-run enterprises in housing, business development, education, basic services, and healthcare.  How to Produce?  How to Produce? Businesses owners and consumers make production and purchase decisions based on current market economic standards. For Whom to Produce? For Whom to Produce? Produces goods and services for domestic and international markets based on the market price system. GDP Per Capita: $9,800

Nigeria Economy: MIXED MOSTLY COMMAND MIXED MOSTLY COMMAND What to Produce? What to Produce?-Oil production & petroleum products most of GDP; imports food products  -Member of OPEC How to Produce?- How to Produce?-Poorly organized after years of government corruption & dictatorship; trying to reorganize with more private business For Whom to Produce? For Whom to Produce? -46% of Nigeria’s daily oil production is exported to the United States

Wealth in Africa  Despite poverty, countries have riches in minerals and natural resources that are very valuable  ISSUES: Not distributed equally, not a healthy economy, and wealth from resources used for civil war or stolen

Uranium  An element essential for nuclear weapons & nuclear power/fuel; is also used to date artifacts & in photo chemicals  20% of world’s supply in Africa  Undercover trade takes place with those secretly producing nuclear weapons; takes away money from people/government

Oil  Source of fuel found along Mediterranean coast, Sudan, & Nigeria  Second largest producer of petroleum/petroleum products behind Middle East  Oil reserves should guarantee economic prosperity and comfortable lives for people  Profits go to corrupt politicians/businessmen or funds not spent wisely to help the people’s needs(Nigeria-little/no agriculture investment)

Gold  Mined and sold for jewelry and money  40% of world’s gold from South Africa  Most used to benefit the country & people  Still high unemployment(lasting impact of apartheid issues) and gold miners work in unsafe conditions with very low pay

Diamonds  Africa world’s largest producer of diamonds  South Africa- business dominate by the DeBeers Company; well regulated trade & country enjoys benefits from riches  Other African countries- diamond wealth causes chaos  Smuggled or stolen diamonds sold to buy weapons and ammunition for wars/civil conflicts  “Blood/Conflict Diamonds”- mined & put on market for funding armed conflict