Download Study Guide Europe Economics ANSWER KEY

NAME________________________
DATE__________________
PERIOD_____________
Study Guide CA - European Economics
1.
What is a command economy? AN ECONOMY CONTROLLED BY THE GOVERNMENT- THE
GOVERNMENT MAKES ALL THE ECONOMICS DECISIONS, OWNS BUSINESSES
2. What is a market economy? An economy based on supply and demand- no government involvement.
FREE ENTERPRISE!
3. What is a mixed economy? A mixture of command and market- free enterprise, but also some
government involvement
4. What is a traditional economy? An economy based on the traditions of the past- they make what
they’ve always made the same way they’ve always made it!
5. Write the definition and give an example of each
Factor of
Production
Human Resources
Definition
Example
The people that work and how skilled they are!
Educated people, well
trained people
The tools you need to do a job
Machines, factories,
computers
Resources you find in nature
Trees, minerals, fossil
fuels
Capital Resources
Natural Resources
Entrepreneur
A person who starts their own business
6.
Why will a country that invests in human capital have a more successful economy? Investing in
human capital (training, education) makes workers more productive and brings more money to
the country
7. What are land, water, trees, fish, oil, and minerals examples of? Natural Resources
8. What is the total value of all goods and services produced in a country in one year? Gross
Domestic Product=GDP
9. What do the economic systems of the United Kingdom, Germany, and Russia have in common?
They are all mixed economies- they have some command and some market
10. What is a tariff? A tax on imported goods
11. What is a quota? A limit on the amount of goods you can import
12. What is an embargo? Means ABSOLUTELY NO TRADING!
13. Which of the following conditions must exist if two people want to engage in voluntary trade?
Both have something the other person wants!
14.
What is a free enterprise economic system? MARKET ECONOMY! Businesses make what the
people want and they people decide if they want to buy it
15. Describe GDP. The total value of a country’s goods and services produced.
16. Why is it important for a country to invest in human resources? A country’s economy is more
successful when workers have good education and health care.
17. How do entrepreneurs help increase a country’s GDP? They bring new ideas and jobs to the
economy
18. In Germany, who decides which goods will be produced and sold? Businesses
19. What problems will occur in a country that does not invest in human capital? Workers will not be
as productive
20. The European Union was formed to address common environmental problems, help to maintain
peace, and promote what? Economic prosperity- wealth!
21. Based on the economic law of supply and demand, which will most likely happen when the supply
of an item increases? If supply goes up, you have too many, so the price will lower
22. Short Answer: What is an entrepreneur? A person who starts their own business. They bring new
ideas and jobs to the economy, which is good! A country wants entrepreneurs!