Europe Economics Voc.

A country that has aspects of a market economy plus a command economy is called a ___________.

• Traditional Economy

• Command Economy

• Market Economy

• Mixed Economy

In which economic system are entrepreneurs MOST likely to exist?

• Command Economy

• Market Economy

• Traditional Economy

• Communist Economy

What are the advantages and disadvantages of a command economy?

• The government provides for basic needs, but choice is limited.

• The government is not involved in production, consumption, or distribution. Many choices available

• Mix between government control and private business. Limited government regulation of industry.

• Businesses are based on tradition and choices are limited. People barter for goods.

The diagram shows an economic continuum. Which letter on the continuum represents where a Pure Market economy would most likely be located.

<-----A------B------------------------------C---------------------------------D-->

Total Government No Government

Control Control

• A

• B

• C

• D

Why is it important for a country to invest in human capital?

• All humans need capital to survive

• Starting your own business is good for the economy

• Countries that invest in the education and training of their people usually have a higher GDP

• Countries that invest in new technology and machinery produce more and have a higher GDP

Which is an example of a quota?

• China allows only 345,000 Ford Mustangs into their country each year.

• China charges 7.9% tax on Ford Mustangs imported into their country.

• China refuses to buy Ford Mustangs from the USA.

• China puts a tax on all exports to the USA.

Which is an example of an embargo?

• China allows only 345,000 Ford Mustangs into their country each year.

• China charges 7.9% tax on Ford Mustangs imported into their country.

• China refuses to buy Ford Mustangs from the USA.

• China puts a tax on all exports to the USA.

Which is an example of an tariff?

• China allows only 345,000 Ford Mustangs into their country each year.

• China charges 7.9% tax on Ford Mustangs imported into their country.

• China refuses to buy Ford Mustangs from the USA.

• China puts a tax on all exports to the USA.

What does it mean for a business to specialize in a particular good or service?

• Countries should import resources to produce their goods at higher prices.

• Countries should use their own resources to produce goods more efficiently and at lower prices.

• Countries should produce as many different things as they can. They should be good at everything.

• Countries should not worry about specialization because it leads to increased prices and less competition.

Lisa started a small business selling t-shirts. She used her home as the place to start the business. She purchased the shirts from a company in Haiti. After selling a large amount of t-shirts, Lisa hired her cousins to help package and ship the t-shirts to customers.

In this scenario, Lisa would be an example of a(n) ________________.

• Entrepreneur

• Natural Resource

• Human Capital

• Physical Capital