Review for SW Asia Economics Summative

If OPEC cut oil production for next year, what would most like be the effect?

• prices would not change

• oil prices would most likely rise

• oil prices would most likely decrease

• the price for substitute products would decline

Tariffs, quotas, and subsidies are examples of

• free trade.

• trade barriers.

• trade incentives.

• restrictive license.

What Year was OPEC Created?

• 1961

• 1949

• 1960

• 1994

What is OPEC's main purpose?

• To regulate and stabilize the price of oil on the world market

• To increase the supply of oil available to the world markets

• Coordinate peace agreements between Middle Eastern nations and the United States

Which industry does the government of Saudi Arabia heavily control?

• oil
• technology
• agriultural
• textile manufacturing

Which THREE of these nations control large amounts of oil?

• Iraq

• Israel

• Kuwait

• Qatar

• Yemen

Answer explanation

Iraq, Kuwait, and Qatar control more oil than any of the rest of these countries.

What incentive might a country's national government have to improve education and literacy?

• Educated populations do not need to trade with other countries.

• Educated populations have a higher standard of living than uneducated populations.

• Educated populations are less likely to distrust the government.

• Educated populations produce more agricultural goods than uneducated populations.

Answer explanation

Remember that literacy is almost always directly tied to GDP!

Which answer describes economic specialization?

• An economy in which producers look to the past to answer the three economic questions.

• An economy with all trade barriers removed.

• An economy where the government answers all the economic questions.

• An economy where producers produce goods they can create most efficiently and trade for others.

Answer explanation

Specialization increases the efficiency of production so more goods can be produced in a shorter amount of time!

What is a tariff?

• A tax on goods imported from another country

• A limit on the amount of goods that can be imported from a country

• A ban on goods coming in and out of a country

• A tax on the exported goods leaving a country.

Why would a government want to place an embargo?

• To expand consumer choice and economic opportunity

• To increase profits of domestic manufacturers

• To protect domestic jobs

• To encourage a country to change policies.

Answer explanation

Remember the US embargo on Cuba. It was placed because the US did NOT like Cuba's communist practices!