1. Europe Unit 3 Economics and Environmental Understandings

2. Standards SS6E5 The student will analyze different economic systems A. Compare how traditional, command, and market economies answer the economic questions of 1. what to produce, 2. how to produce, 3. who to produce for

3. B. Explain how most countries have a mixed economy located on a continuum between pure mixed and pure command C. Compare the basic types of economic systems found in the United Kingdom, Germany, and Russia

4. VOCABULARY! Understanding the vocabulary in this unit is VERY important. We will be using many words you may not have ever heard before. In order to understand our lessons, you must first understand the vocabulary.

5. Economics The study of how resources are managed in the production, exchange, and use of goods and services

6. What are the ‘Three Economic Questions?’ 1.What will be produced? 2.How will it be produce? 3.For whom will it be produced?

7. Good Any object you can buy to satisfy a want. (It has to be tangible, meaning it exists physically – you can touch it)

8. Service An action you can pay for (buy) to meet a want. (Like paying somebody else to rake the leaves on your lawn)

9. Supply and Demand An economic condition that states that the price of a good rises or falls depending on how many people want it (demand) and depending on how much of the good is available (supply)

10. Scarcity A word in economics used to describe the conflict between people’s desires (wants) and limited resources. (There will never be enough of anything to meet all people’s every want)

11. Factors of Production One of the elements needed for production of goods or services.

12. Natural Resources Raw materials used to make goods. Examples include land, water, forests, minerals, soil, and climate.

13. Labor Resources Workers needed with the appropriate knowledge, skills, and experience to make goods or provide services

14. Capital Resources Machines, factories, and supplies needed to produce good ands services

15. Entrepreneur The people who bring natural resources, labor resources, and capital resources together to produce goods and services

16. Economy The system by which business owners in a region use productive resources to provide goods and services that satisfy people’s wants.

17. Traditional Economy An economic system in which social roles and culture determine how goods are made, sold, and bought.

18. Command Economy An economic system in which the government decides what goods will be produced, how they will be produce, and how they will be distributed

19. Market Economy An economic system that allows business owners to compete in the market with little to no government interference.

20. Mixed Economy An economic system that has features of traditional, command, and market systems.

21. GDP (Gross Domestic Product) The total value of the goods and services produced in a country in a given period of time (usually a year)

22. GDP Per Capita The total value of the goods and services produced in a country in a given period of time (usually a year), divided by that country’s population: suppose to be how much value was produced per person

23. Human Capital The knowledge and skills that allow workers to produce goods and services and earn an income.

24. Consumer A person who buys and uses goods or services

25. Export A product traded with or sold to another country

26. Import A product brought into a country through trade or sale

27. Trade Barrier A geographic (or government created) feature that prevents or slows trade.

28. Tariffs A fee (tax) placed on imported or exported goods by a country’s government in order to limit trade.

29. Quotas Restrictions on the amount, or number, of a good that may be imported into a country. (This is done to cause that good to be more expensive and thus encourage people to purchase products made in their own country)

30. Embargos A type of trade barrier in which a government places restrictions on the import or export of certain goods. Embargos are often backed by military force.