Economic Systems of SW Asia bcms

What is ‘specialization’?

• A.  Producing all goods that the country needs so that trade with other countries isn’t necessary
• A.  Trying to avoid investing in capital goods because it’s too expensive
• A.  Producing goods a country can make most easily so that they can trade for goods that they can’t produce locally
• A.  Directly trading goods with another country without having to use money  

Why is specialization so valuable to international trade today?

• A.  Most countries only make one product really well.
• A.  Specialization allows people to do a more efficient job at producing what they make best and trade for the things they need.
• It keeps the prices low on imported goods.
• A.  It limits the amount of agriculture a country allows.

Saudi Arabia specializes in the production of:

• Oil and olives
• Olives and grapes
• Oil and natural gas
• Livestock

Why has Israel specialized in the area of technology?

• A.  It has few natural resources and little farmland.
• It has a poorly educated population.
• A.  The money earned is used to support the military.
• A.  The country has little in the way of fishing.

The economies of Israel, Saudi Arabia, and Turkey can best be described as:

• Traditional
• Command
• Market
• Mixed

In a traditional economy, how are economic decisions made?

• Government leaders
• Consumers
• Customs and traditions
• A.  A mix of consumers and government leaders

Why was OPEC created?

• To design new technology for getting oil out of the ground
• To regulate the supply and price of oil
• A.  To keep non-members from producing any oil
• A.  To help Palestinian Arabs with  problems with Israeli Jews

Where are most OPEC countries located?

• Africa
• North America
• Southern and Eastern Asia
• Southwest Asia

What happens to the price of oil when OPEC countries decide to reduce production?

• Oil prices decrease  
• Oil prices increase
• Oil prices stay the same
• Oil becomes free to OPEC members

What is the definition of Gross Domestic Product (GDP)?

• The total value of all the goods and services a country produces in a year
• The total value of all goods imported within a year
• The total value of taxes collected in a year
• The total value of all goods produced by entrepreneurs in a year