Download Europe Unit 3

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
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
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.
Economics
The study of how resources are
managed in the production,
exchange, and use of goods and
services
What are the ‘Three
Economic Questions?’
1. What will be produced?
2. How will it be produce?
3. For whom will it be produced?
Good
Any object you can buy to satisfy a
want. (It has to be tangible,
meaning it exists physically – you
can touch it)
Service
An action you can pay for (buy) to
meet a want. (Like paying
somebody else to rake the leaves
on your lawn)
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)
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)
Factors of Production
One of the elements needed for
production of goods or services.
Natural Resources
Raw materials used to make goods.
Examples include land, water,
forests, minerals, soil, and climate.
Labor Resources
Workers needed with the
appropriate knowledge, skills, and
experience to make goods or
provide services
Capital Resources
Machines, factories, and supplies
needed to produce good ands
services
Entrepreneur
The people who bring natural
resources, labor resources, and
capital resources together to
produce goods and services
Economy
The system by which business
owners in a region use productive
resources to provide goods and
services that satisfy people’s wants.
Traditional Economy
An economic system in which
social roles and culture determine
how goods are made, sold, and
bought.
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
Market Economy
An economic system that allows
business owners to compete in the
market with little to no government
interference.
Mixed Economy
An economic system that has
features of traditional, command,
and market systems.
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)
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
Human Capital
The knowledge and skills that allow
workers to produce goods and
services and earn an income.
Consumer
A person who buys and uses goods
or services
Export
A product traded with or sold to
another country
Import
A product brought into a country
through trade or sale
Trade Barrier
A geographic (or government
created) feature that prevents or
slows trade.
Tariffs
A fee (tax) placed on imported or
exported goods by a country’s
government in order to limit trade.
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)
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.