1. The study of how people, businesses, and societies choose to use scarce resources to satisfy their unlimited wants

2. Economic systems answer the questions of 1-what to produce, 2- how to produce, and 3-for whom to produce?

3. How many basic types of economic systems are there? 3 Name the economic systems. Traditional, Command, Market Which economic system do most textbooks say is the most common throughout the world? Mixed. The GCEE states that mixed is not an economic system but rather a blending of two different types of systems.

4. Traditional Economy- A system in which social roles and culture determine how goods are made, sold, and bought.

5. Command Economy-A command economy, also called planned economy, is directly controlled by the government

6. Socialism- an economic system in which the government owns some or all of the factors of production

7. Communism- an economic system based on one-party rule, government ownership of economic resources, and decision-making by government officials

8. Market Economy - Based on individual choices and voluntary trade.

9. Capitalism- an economic system based on the private ownership of economic resources and in which all individuals make economic decisions

10. Free Enterprise System- an economic system that allows business owners to compete in the markets with little government control

11. Mixed Economy an economy in which there are elements of both public and private enterprise

12. Economic Systems Pure Market Pure Command

13. Economic Systems Pure Market Pure Command Iran 45% Saudi Arabia 64% Israel 68%

14. Economic Systems Pure Market Pure Command Nigeria 55% South Africa 64%

15. Economic Systems Pure Market Pure Command North Korea 2% India 54% Japan 73% China 53%

16. Factors of Production- the resources needed to produce goods and services

17. Land- a factor of production that includes all natural resources found on or under the ground

18. Natural Resources- Raw materials that are used to support life and make goods (2 types)

19. Natural Resources Renewable- Resources that can be replace such as trees and freshwater

20. Natural Resources- Non-renewable- resources that cannot be replaced such as oil and natural gas

21. Capital Goods- resources such as factories, machinery, and tools that people use to make other goods

22. Human Capital- the knowledge and skills that allow workers to produce goods and services and earn income

23. Labor- all the time, effort, and talent that goes into production

24. Entrepreneur- someone who brings together land, labor, and capital goods to produce goods and services

25. Expenses- Money that is spent by an individual, a business, or a government

26. Income- Money that a person receives in exchange for work or from the use of property

27. Economic Growth- the increase in the value of all the goods and services a country makes from one year to the next

28. Specialization- countries produce the goods and services that they can produce most efficiently

29. International Trade- the exchange of goods and services between countries

30. Imports- goods brought into one country from another through trade or sale

31. Exports- goods and services traded with or sold to other countries

32. Free Trade- an exchange of goods without the use of tariffs or quotas

33. Free Enterprise System- an economic system that allows business owners to compete in the markets with little government control

34. Supply and Demand- Producers supply goods and services and consumers demand them. Prices in the market are determined by supply and demand.

35. Organization of Petroleum Exporting Countries (OPEC) - a cartel of twelve countries They decide how much oil will be produced during a certain period of time in order to regulate and set the prices (laws of supply and demand).

36. Trade barrier- any regulation or policy that restricts international trade, especially tariffs, quotas, etc.

37. Tariff - a tax placed on goods when they cross a political boundary

38. Quota- a limit on the quantity of goods that can be imported into a country

39. Embargo- Government prohibition of exports or imports with respect to specific products or specific foreign countries

40. Balance of Trade- the difference in value between a country’s exports and imports

41. Currency- money in any form that is accepted as a medium of exchange, but especially paper money

42. Foreign Exchange Market- a place where money from different countries is bought and sold for a price

43. Exchange Rate- the amount of one currency that can be purchased for a given unit of another

44. THE END