“Review Study Guide nightly” 1. Copy homework in agenda: “Review Study Guide nightly” 2. Get out 2 sheets of notebook paper and label the first: Middle East Economics Study Guide

1. In a traditional economy, how are economic decisions made 1. In a traditional economy, how are economic decisions made? custom and habit 2. In a command economy, how are economic decisions made? government planners 3. In a market economy, how are economic decisions made? consumers and the market 4. Who takes on the financial risk in starting a new business in a market economy? individual business people

5. Why are most modern economies referred to as mixed 5. Why are most modern economies referred to as mixed? Most countries have aspects of all 3 economic types at work in their economies. 6. Why do most countries today operate somewhere between a market economy and a command economy? Most economies have found they need a mix of free market and some government control to be successful and protect consumers. 7. The economies of Israel, Saudi Arabia, Turkey, and Iran could best be described as Mixed 8. How have the Israelis made up for their lack of natural resources? They have developed strong technology companies in their economy.

9. Which industry does the government of Saudi Arabia heavily control 9. Which industry does the government of Saudi Arabia heavily control? Oil 10. How has the Saudi king used the profits from oil to help other areas in his kingdom? Oil profits have paid for modern technology and services. 11. What is “economic specialization”? producing goods a country can make most efficiently so they can trade them for goods made by others that cannot be produced locally. 12. Saudi Arabia specializes in the production of oil and gas.

13. Israel specializes in agricultural technologies. 14. What is a tariff? a tax placed on goods coming into one country from another 15. What is a quota? a limit to the number or amount of a foreign-produced good that is allowed into the country 16. What is an embargo? a formal halt to trade with a particular country for economic or political reasons

17. Why was OPEC created? to regulate the supply and price of oil 18. What happens to the price of oil when OPEC countries decide to limit production? prices rise 19. Where are most of the OPEC countries located? Southwest Asia 20. Why is it important for nations to have a system to convert from one currency to another? This makes it possible to buy and sell goods between nations with different types of currencies

21. What is human capital? skills and education workers have 22. Why have the Israelis made a big investment in human capital? They need well-trained workers because their economy depends on advanced technology. 23. Why would the Saudi oil industry need a large investment in human capital? The technology in the oil industry is very complicated. 24. One of Iran’s biggest problems with their state-run oil industry is inefficiency and poor organization.

25. If a country does not invest in its human capital, how can it affect the country’s GDP? GDP may go down because poorly trained workers will not be able to do their jobs as well. 26. What are capital goods? the factories and machines used to make goods 27. Israel has invested heavily in capital goods in all of the following areas EXCEPT oil 28. Why are oil and gas such valuable natural resources? Industrial countries depend on oil and gas as their energy supply.

29. How much of the oil used by the U. S. has to be imported every day 30. How has the Saudi government used its national wealth to change the country? The government has paid for improvements in transportation, education, health care, and agriculture. 31. How do Iran and Saudi Arabia benefit from belonging to OPEC? OPEC keeps the price of oil high on the world market. 32. What is an entrepreneur? someone who is willing to take a risk to begin a new business