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StandardsSS6E5 The student will analyze different economic systemsA. Compare how traditional, command, and market economies answer the economic questions of 1. what to produce, 2. how to produce, 3. who to produce for
B. Explain how most countries have a mixed economy located on a continuum between pure mixed and pure command
C. Compare the basic types of economic systems found in the United Kingdom, Germany, and Russia
VOCABULARY!Understanding the vocabulary in this unit is VERY important. We will be using many words you may not have ever heard
before. In order to understand our lessons, you must first
understand the vocabulary.
EconomicsThe study of how resources
are managed in the production, exchange, and use of goods and services
What are the ‘Three Economic
Questions?’1. What will be produced?2. How will it be produce?
3. For whom will it be produced?
GoodAny object you can buy to satisfy a want. (It has to be tangible, meaning it exists
physically – you can touch it)
Service
An action you can pay for (buy) to meet a want. (Like paying somebody else to rake the
leaves on your lawn)
Supply and Demand
An economic condition that states that the price of a good rises or falls depending on how many people want it (demand) and depending on how much of the good is available (supply)
Scarcity
A word in economics used to describe the conflict between people’s desires (wants) and limited resources. (There will
never be enough of anything to meet all people’s every want)
Natural Resources
Raw materials used to make goods. Examples include land, water, forests, minerals, soil,
and climate.
Labor Resources
Workers needed with the appropriate knowledge, skills, and experience to make goods
or provide services
Entrepreneur
The people who bring natural resources, labor resources, and
capital resources together to produce goods and services
Economy
The system by which business owners in a region use productive resources to
provide goods and services that satisfy people’s wants.
Traditional Economy
An economic system in which social roles and culture
determine how goods are made, sold, and bought.
Command Economy
An economic system in which the government decides what goods will be produced, how
they will be produce, and how they will be distributed
Market Economy
An economic system that allows business owners to
compete in the market with little to no government
interference.
GDP (Gross Domestic Product)
The total value of the goods and services produced in a country in a given period of
time (usually a year)
GDP Per CapitaThe total value of the goods and
services produced in a country in a given period of time (usually a year), divided by that country’s population: suppose to be how much value was produced per
person
Human Capital
The knowledge and skills that allow workers to produce
goods and services and earn an income.
Tariffs
A fee (tax) placed on imported or exported goods by a
country’s government in order to limit trade.
QuotasRestrictions on the amount, or number, of a good that may be imported into a country. (This is done to cause that good to be more expensive and thus
encourage people to purchase products made in their own
country)