1. Warm-up Monday, 11/18/13 What are the three ways governments distribute power? What are the three ways citizens participate in government? AGENDA: Government Review 1.Economic definitions

2. ECONOMICS The social science that deals with production, distribution and consumption of goods and services.

3. What to produce? How to produce? For whom to produce? economic system – the organized way that a government answers the following questions:

4. Traditional economies have been historically found in underdeveloped countries. Trading, farming, hunting and gathering are used in this type of economy. Believe it or not, this economic system is still found today in parts of South American, Asia and Africa. Traditional economy – economic decisions are based on custom and habit.

5. command economy – a system in which the government makes the major decisions regarding the production and distribution of goods and services. Also called a planned economy, the government decides on what to produce, how to produce and for whom to produce. It tends to be poorly organized and lack quality control. China used to be a command economy but is now allowing free enterprise. Cuba, North Korea and Myanmar are command economies. What do these countries have in common?

6. Unlike a command economy, supply and demand is involved on deciding on what to produce, how to produce and to whom to produce. The US is considered a market economy even though there is no country that has a total market economy. Why do you think that is? Market economy – a system in which consumers help determine what is to be produced by buying or not buying certain goods and services.

7. mixed economy – a combination of command and market economies. command market China ? USA? Iran? Truth is…economies are always changing!

8. Southwest Asian Economies market command Saudi Arabia Iran IsraelTurkey

9. Middle East Economies Israel, Saudi Arabia, Iran and Turkey are all mixed economies. Israel relies on technology Saudi Arabia relies on oil Iran relies on oil Turkey has little economic freedom

10. Warm-up Tuesday, 11/19/13 Who makes most of the important decisions in an oligarchy? AGENDA: Finishing economic terms OPEC/Supply and Demand ME Economy: Human Capital and Capital Goods ME graphs Announcement: Government Quiz tomorrow

11. Trade specialization – products a country makes best and that are in demand on the world market. trade barrier – anything that restricts trade from one country to another. tariff – a tax on imports or exports quota – a limit on how many products can be imported embargo – a halt to trade with another country or group of countries The exchanging of goods and services

12. Supply and Demand One very basic economic principle is that of supply and demand, which helps explain why prices of goods and services vary in a free market. Simply, put, when many people want to buy a product that is in short supply, the price increases. If too much of a project is available with not enough people wanting to buy it, the price goes down. Based on the principle of supply and demand, a producer with a large supply of a product could afford to sell that product at a lower price than a lower-supply producer would be able to do. Still, if the high-supply producer lowers the price, competition in the market will force the lower-supply producers to do the same. This situation could drive prices down even if there is high demand, which could spell D-I-S-A-S-T-E-R for small producers. Price increasesPrice decreases

13. OPEC OPEC was established in 1960 by five original member countries: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela and has since been joined by others. The expressed purpose of the organization is to see that global oil prices remain fair and stable, allowing member nations to earn needed money from the sale of their oil. They do this by adjusting their petroleum production to help maintain a balance in supply and demand. OPEC ministers meet at least twice yearly to make decision about members’ oil production levels.

14. currency – something that is used as exchange; money exchange rate – a system of changing from one type of currency (money) to another capital goods – Items that are used to produce something. Ex: machinery, computers, factories human capital – the set of skills which an employee acquires on the job which increase that employee’s value in the marketplace literacy rate – The amount of people who can read and write in a country. per capita – for each person

15. standard of living – the degree of wealth and material comfort that is available to people. infant mortality – the death of children under one year of age. life expectancy – the time period that a person is expected to live. gross domestic product (GDP) – the total market value of all goods and services produced by a country during a specific time period. entrepreneur – an individual who starts their own business