SW Asia Economic Understandings

What is specialization?

• A.   Producing all goods that the country needs so that trade with other countries isn’t necessary

• B.    Trying to avoid investing in capital goods because it’s too expensive

• C.   Producing goods a country can make most easily so that they can trade for goods that they can’t produce locally

• D.   Directly trading goods with another country without having to use money

Why is specialization so valuable to international trade today?

• It limits the amount of agriculture a country allows.

• It keeps the prices low on imported goods.

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

• Most countries only make one product really well.

In a traditional economy, how are economic decisions made?

• Consumers

• Government leaders

• A mix of consumers and government leaders

• Customs and traditions

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

• The total value of all goods imported within a year

• The total value of all the goods and services a country produces in a year

• The total value of all goods produced by entrepreneurs in a year

• The total value of taxes collected in a year

Tariffs and quotas are alike because they both __________________.

• restrict or limit trade between countries.

• completely stop trade between countries.

• increase trade between countries.

• make trading a lot easier between countries.

A person who takes risks by starting a new business is known as a(n):

• Economist

• Dictator

• International trader

• Entrepreneur

Where are most OPEC countries located?

• In the U.S.

• SW Asia

• North America

• Canada

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 is free

Why was OPEC created?

• To design a new technology

• To regulate the price and supply of oil

• To keep non-members from producing

• To help Palestine

Which Middle Eastern economy has the most free (from government control) mixed economy?

•   Israel

• Turkey

• Saudi Arabia

• None of the above