LATIN AMERICA TAKE HOME QUIZ 1. If you are learning about how countries produce, distribute and consume goods and services, you are studying _economics__. 2. In a __market__________ economic system, private citizens make decisions about production, distribution and pricing. When the government makes these decisions, this is called a ___command________ economy. 3. __Traditional__ economic systems base decisions on customs, traditions and social roles.

4. What do Entrepreneurs do? Give an example of one. They bring together labor, capital and natural resources to produce a good or service. A man starts a business by buying a factory, hiring workers and selling what the business produces. 5. Give an example of a Capital Resource. Briefly describe why it is a good example. A man starts a horseback riding academy to teach people to ride horses. The horses are a capital resource he needs to get started. 6. Give an example of a Labor Resource. Briefly describe why it is a good example. The instructors who teach people to ride (in the example above) are labor resources.

7. Give an example of a Natural Resource. Briefly describe why it is a good example. Wood used to build rocking chairs is an example of natural resources. 8. Give an example of a service. Give an example of a good. Explain why these two terms are not the same. A service is a task performed for money. A good is an item that is produced, bought, sold and/or consumed. Service: a maid comes to clean the house (a task performed for money) Good: a loaf of bread you buy at the bakery 9. List the 3 questions answered by economic systems. What to produce? How to produce it? For whom it is produced?

10. Economic systems that have features of both Command and Market economies are called ___mixed___________ economies. Mixed economies are the most common system. 11. Explain what happens to the price of a good if the demand for it is higher than the supply available? The price usually goes up because if many people want it and it is rare, the producers can charge more for it because they know people will be willing to pay more for it if it is in short supply. Producers are always going to try to sell an item for the highest price that consumers will pay.

12. Tracey invents a hamburger maker that costs 12 dollars to make. This cost is 8 dollars for materials and 4 dollars for labor. She sets the price of the hamburger maker at 15 dollars. Which term best describes the 3 dollars Tracey will earn when she sells the hamburger maker? A. investment B. profit C. demand D. inflation 13. In the situation above, which term best describes the 12 dollars Tracey used to produce the hamburger maker? A. investment B. profit C. demand D. inflation

14. List the Factors of production: Capital resources, natural resources, labor resources and entrepreneurs 15. Who are consumers? people who buy and use goods and services

16. Explain why inflation is bad for consumers. Inflation is a period of time where prices go up but the income of consumers stays the same. It is bad because people have to spend more money to get the goods and services they normally would get for less money. People may have to get by with less of the product or choose to go without something they would normally get. 17. Define GDP: the total amount of goods and services produced in a country over a period of time. (This is usually measured in total dollars)

18. List 3 situations that impact 19. List 3 situations that impact GDP positively (boost it, help it) GDP Negatively (slow it, bring it down) High literacy rate, many natural High unemployment, drought, inflation resources, no trade barriers (tariffs, quotas, embargos)

20. The quality of life based upon the availability of goods and services to the people of a country is called _standard of living_____.

21. List 5 key facts about Cuba’s Economy. What are their major resources? What are its major industries? What facts about it drive it’s GDP up or down? Command economy, lost support from USSR after cold war, sugar is a major export, US embargo hurts trade, frequent tropical storms/hurricanes can disrupt production and trade, small size and limited resources hurt trade, many items must be imported from other countries

22. List 5 key facts about Brazil’s Economy. What are their major resources? What are its major industries? What facts about it drive it’s GDP up or down? Mixed economy, shared border with many nations helps trade, large size and many various natural resources help trade, member of MERCOSUR, citrus fruit are large exports

23. Explain how a tariff works: a fee is added to imports coming into a country to drive the price up so consumers will by local products (The local goods will now have a lower price because of the tariff that was added to the imported goods) 24. Explain how a quota works: a limit on the number of imported goods is set so local products will be more desirable once that limit is reached. (If an import has a lower price, people will buy it over a higher-priced local good…once the quota number is reached, no more imports can be sold and people are forced to by the local goods) 25. Explain how an embargo works: a law is passed outlawing trade with another country…Ex. US does not trade with Cuba

26. What impact would being a member of the N.A.F.T.A. have on a country’s GDP? Explain. Trade would increase because faster and tariff-free trading makes more money for all members. GDP would go up because member nations would produce and sell more products and services.