Economies

Economics

Supply of human skills, natural goods, and capital goods

Goods and Services

Products or services sold to a consumer or another industry

Gross domestic productGDP

• The total amount of goods and services produced in a country

Four Factors of Production

• Human capital• Capital goods• Natural Resources• Entrepreneurship

Human capital

The value that peoplebring to the workplace

Capital goodsGoods used to make products

Natural resources

Resouces that come from the Earth such as trees, fresh water,Soil, plants or animals

entrepreneurship

A person who takes on the risk and possible reward of operating a new business

Types of economies

• Traditional• Command• Market

Traditional economy

• Economy dominated by methods and techniques that have strong social support even though they may be out of date

Command economy

• An economy that is planned and controlled by a central administration

Market economy

• Economy that operates by voluntary exchangein a free market and is not planned or controlled by a central authority—a capitalistic economy

Types of capital investments

• Factories• Machinery• Technology

Trade Barriers

• Tariffs• Quotas• Embargoes

Tariffs

• Taxes on goods coming into a country

quotas

• Limits on the number of goods that can be imported from a certain country

embargo

Ban on trade with another country