1. Study Guide Essential Questions
Economy
Study Guide Essential Questions

2. #1 What is the difference between a primary and a secondary product?
Primary = raw material from the earth
Secondary = goods made from raw materials

3. #2 What is the difference between a good and a service?
Goods = things I can buy (tangible)
Services = jobs that I pay someone to do for me

4. Scarcity causes global trade You’ve got what I need!
#3 What is the cause of global trade? How do countries decide who to trade with?
Scarcity causes global trade
You’ve got what I need!

5. #4 What is scarcity? Lack of sufficient resources
Not enough of something to go around

6. #5 What is the difference between an import and an export?
Import = bring goods and resources IN
Export = send goods and resources OUT
Countries export what they in surplus (extra)
Countries import resources that are scarce.

7. #6 What is the difference between supply and demand?
Supply = How many there are.
Demand = How badly people want it.

8. #7 How do supply and demand affect price?
Price follows demand
If demand is high I can raise the price.
If demand is low, I can lower the price.
If price is too high, demand can drop
If price is too low demand will increase but supply will run out.

9. #8 What is a positive effect of competition?
Competition is GOOD for the consumer
Higher Quality
Lower Prices

10. #9 What is a negative effect of competition?
Competition can be less beneficial for the seller.
Lower prices = lower income/profit
Harder for the seller to make a higher quality product.

11. http://www.imf.org/external/np/exr/center/ students/trade/