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Unit IV: Economics of SWA
STUDY GUIDE!
Complete the study guide, It COUNTS in your Notebook! RETURN to TEACHER with NB.
Types of Economies
Which type of economy answers each the following questions? (Traditional, Command, Market, or Mixed)
1. Technology is not important ____________Traditional______________
2. Factories are concerned about quotas _____Command_________
3. People, competing to make a profit, answer the 3 economic questions ___Market___________
4. Profit motivates people to produce _____Market____________
5. Found in rural, non-developed areas _______Traditional _________
6. The people and the government decide how to answer the 3 economic questions ___Mixed_____
7. Customs and traditions are base values ___Traditional______________
8. Individuals can choose their own jobs _____Market___________
9. What you produce depends on what the government needs _____Command_____________
10. The government or central authority answers the 3 economic questions ___Command_________
11. There is no competition between businesses ___Command____________
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Economies of Israel, Turkey, & Saudi Arabia
What type of jobs do most people in Iran and Saudi Arabia have? ___Oil Industry_________
What country has a lot of oil? ____Saudi Arabia________________
What country has very few natural resources? ____Israel________
What country has a lot of technology? _____Israel____________
Which country (or countries) has a mixed economy? ___Israel, Turkey & Saudi Arabia___________
What country has their largest product (petroleum) owned by the government? Saudi Arabia
Israel has a mixed economy but is more _Market than Command____ on the continuum.
Saudi Arabia is closer to ____Market _________ on the continuum. (market or command)
Turkey has a mixed economy but is more __Market than _Command_____ on the continuum.
Types of Resources:
Name at least 5 natural resources _____Trees, Water, Oil, Diamonds, Coal________________
________________________________________________________________________________
Name at least 5 capital resources ______Tractors, Computers, Factories, Vehicles, Tools______
________________________________________________________________________________
Name at least 5 human resources ____Doctor, Teacher, Nurse, Policeman, Soldier____________
________________________________________________________________________________
How can a country invest in human capital? __Build Schools (Education), Hospitals (Healthcare), Job
Training_________________________________ ________________________________________
________________________________________________________________________________
How can a country invest in capital goods? ____Build Highways (Trade), Build Shipping Docks (Trade),
Factories__________________________________________________________________________
6. Why would a country want to invest in human and capital resources? __Investing in human and capital
resources gives countries better workers, better workers do more efficient work, create new products
and contribute to a higher GDP, which leads to a higher standard of living. ____________________
________________________________________________________________________________
Vocabulary Check - Make sure you know the meaning to the following words:
1. Entrepreneurship ___A person that risks capital to create a business or product. _________
2. GDP __All the goods or services produced in a country in one year. __________________________
3. Exchange rate _____The fair value of two different types of currency if they were traded for each other.
Example: $1 dollar = 100 pesos__________________________________________________
4. Specialization __When a country focuses on ONE product or good for world trade. Saudi Arabia=Oil__
5. Command economy ____Government controls economy and answers the 3 economic questions._
6. Market Economy __ People control the economy and answer the 3 economic questions.___________
7. Traditional Economy _ Culture and Traditions control the economy and answer the 3 economic
questions
8. Mixed Economy ___Government and People share control of the economy and answering the 3
economic questions.___________________________________________________________
9. Trade _____Selling goods or products______________________________________________
10. Imports_____Goods or Products brought INTO a country for trade or sale.________________
11. Currency ____Money __________________________________________________________
12. Literacy Rate _The percentage of people that can read and write at a 5th grade level in a country.
Trade Barriers
Tariff
Tax on Imports
Define it:
Give an example:
U.S. tax on imported
cars (Toyota’s from
Japan)
Why would a country want
this trade barrier?
Toyota’s become more
expensive than
American made cars.
Helps American car
companies sell their
cars at a lower price.
Quota
A Limit on the number of
products.
Embargo
A block on all trade due to
political reasons.
U.S. says only 10,000
PlayStations (made in
Japan) will be imported to
the U.S.
U.S. Government does not
allow any Cuban products to
be sold in the U.S.
This allows X-Box (made
by Microsoft/U.S.
company) to be available
at stores when
PlayStations sell out.
Helps American gaming
companies sell more.
U.S. Government does not
like Communist Cuba. So
U.S. money (from Trade)
does not support
governments that the U.S.
does not agree with.
Exchange Rate
Exchange Rates make it much easier for countries to __________TRADE_________________________
Short answer
1. What are the 3 economic questions?
What to produce?
How to produce?
For Whom to produce it for?
2. What is OPEC?
(Confederation type of Union) Organization of Petroleum Exporting Countries, that works together for the
common cause of controlling the world’s supply of oil.
3. The primary function of OPEC is to control the ___Supply__ of _Oil_ in order to control the
_____Price_____ of __Oil_. Less Oil=More Demand for Oil, More Demand for Oil =Higher Price for Oil
4. What does specialization encourage?
Specialization encourages TRADE, amongst countries or people that need products or goods from each
other.
5. How does oil impact economies of SWA?
Oil has created greater wealth (Higher Standard of Living) for some countries, but there is a disparity
(difference) between countries that have oil (rich) and countries that do not have oil (poor).
6. What does low literacy rate tell us about an economy?
Low Literacy Rate tells us that a country does not invest in its Human Capital which leads to a
low GDP which results in a Low Standard of Living.