1. 1 Humanities Economic Unit Ms. Sherbeck’s Humanities Class

2. Economy Is the production and distribution of goods and services –Global economy is one that is world wide –Domestic economy is the economy in a country; U.S. economy is a domestic economy 2

3. 3 Consumers Consumers are the people who buy and use goods and services. Consumers are us, every time we buy anything. Example: When I buy a pair of shoes, I am a consumer. I would be a consumer for the shoe industry.

4. 4 Products/Goods Products/goods are objects or things that are made/manufactured. Products/goods are the things we can buy. Examples: shoes, cars, jewelry, lotion, perfume, TVs, DVDs, CDs, bikes, skateboards, clothes, paper, pencils

5. 5 Services Services are work that other people do for you, that they are paid to do. Examples: waiter/waitress, hair stylist, lawn mower, snow plow, mechanic, babysitter

6. 6 Scarce If something is scarce, it is rare, it is hard to find. Scarce means that there is not enough of something. Scarce items are hard to get. Cost is high. Example: If I had 2 tickets to a concert, and 10 people wanted to go, the tickets would be scarce because I don’t have enough for everyone.

7. 7 Surplus Surplus means that there is more than enough of a product for everyone. Surplus means to have extras. Cost is low. Example: If I had 40 pencils, and only 20 students who needed to borrow a pencil, I would have a surplus (extra) pencils. I have more pencils than I need.

8. 8 Barter/Trade Barter/trade means to negotiate for an item. It means an exchange of goods/services without using actual money. People exchange 1 good/service for another good/service. Example: If I don’t like to cook, but do like to clean, I can barter with someone to cook for me, if I clean for them.

9. 9 Supply Supply is how much of a product a business/company has. Supply high- cost low Supply low- cost high Example: If I own a turtleneck company, and have 1,000 turtlenecks, my supply of turtlenecks would be 1, 000.

10. 10 Demand Demand is whether or not people want to buy your goods/services. Examples: –If people want to buy your product, the demand will be high, price high. –If people don’t want to buy your product, the demand will be low, price low.

11. Imports Goods that are brought in from another country –We can import cars from Japan, we bring cars in from Japan 11

12. Exports Sending goods from your country to a different country –U.S. exports cars to other countries, we send cars to other countries 12

13. Tariff Tax on a good that is brought into a country from another country –If the U.S. buys TVs from Japan, a tariff (tax) is placed on those TVs 13

14. Sanctions Ban on trading goods with another country –Often done if a country is in violation of human rights acts 14

15. Free trade No tax on trade goods NAFTA 15

16. Traditional Economy Economy based on traditions of a region, based on agriculture Rural or farm based areas Third World countries in Africa, Middle East, Asia, South America 16

17. Free Market Economy Consumer driven and ruled by competition Based on supply and demand Not controlled by government Most countries are not completely free market economies, as they have some governmental restrictions U.S. meets many characteristics of free market economy, but has some governmental restrictions 17

18. Command Economy Government owns business Government controls economic activities Iran, Saudi Arabia, North Korea, Cuba, Libya, Burma 18