Economic Understandings of SW Asia

What 3 economic questions are asked when studying traditional, command, market, and mixed economies?

• What to produce, why to produce, when to produce?

• What is your opportunity cost, what economic resources are needed, why should these resources be used?

• What to produce, how to produce, and for whom to produce?

• What is your opportunity cost, why are economic resources needed, when should these resources be used?

Why do businesses specialize?

• Because they can sell more types of goods.

• So they can produce goods at a slower pace.

• So the workers will not become experts in their jobs.

• Because they produce more goods in less time for less money.

Why is specialization so valuable to international trade today?

• Most countries only make one product really well.

• Specialization allows people to do a better job at producing what they make best and trade for the things they need.

• It keeps the prices low on imported goods.

• It limits the amount of agriculture a country allows.

Saudi Arabia specializes in the production of:

• Oil and olives

• Olives and grapes

• Natural gas and oil

• Livestock

Israel has specialized in the area of technology because:

• It has few natural resources.

• It has a poorly educated population.

• The money earned is used to support the military.

• 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

How are economic decisions made in a traditional economy?

• Government planners

• Consumers

• Customs and beliefs

• A mix of consumers and government leaders

Why did the oil producing countries join to form OPEC?

• To design new technology for getting oil out of the ground

• To control the oil supply and its prices.

• To keep non-members from producing any oil

• To help Palestinian Arabs with problems with Israeli Jews

Most OPEC countries are located in _________________.

• 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