1. Copy homework in agenda:
“Review Study Guide nightly”
2. Get out 2 sheets of notebook
paper and label the first:
Middle East Economics
Study Guide
1. In a traditional economy, how are economic
decisions made? custom and habit
2. In a command economy, how are economic
decisions made? government planners
3. In a market economy, how are economic
decisions made? consumers and the market
4. Who takes on the financial risk in starting a new
business in a market economy? individual
business people
5. Why are most modern economies referred to as mixed?
Most countries have aspects of all 3 economic types at
work in their economies.
6. Why do most countries today operate somewhere
between a market economy and a command economy?
Most economies have found they need a mix of free
market and some government control to be successful
and protect consumers.
7. The economies of Israel, Saudi Arabia, Turkey, and Iran
could best be described as Mixed
8. How have the Israelis made up for their lack of natural
resources? They have developed strong technology
companies in their economy.
9. Which industry does the government of Saudi
Arabia heavily control? Oil
10. How has the Saudi king used the profits from
oil to help other areas in his kingdom? Oil profits
have paid for modern technology and services.
11. What is “economic specialization”? producing
goods a country can make most efficiently so
they can trade them for goods made by others
that cannot be produced locally.
12. Saudi Arabia specializes in the production of
oil and gas.
13. Israel specializes in agricultural technologies.
14. What is a tariff? a tax placed on goods coming
into one country from another
15. What is a quota? a limit to the number or
amount of a foreign-produced good that is
allowed into the country
16. What is an embargo? a formal halt to trade
with a particular country for economic or political
reasons
17. Why was OPEC created? to regulate the
supply and price of oil
18. What happens to the price of oil when OPEC
countries decide to limit production? prices rise
19. Where are most of the OPEC countries
located? Southwest Asia
20. Why is it important for nations to have a
system to convert from one currency to another?
This makes it possible to buy and sell goods
between nations with different types of
currencies
21. What is human capital? skills and education
workers have
22. Why have the Israelis made a big investment
in human capital? They need well-trained
workers because their economy depends on
advanced technology.
23. Why would the Saudi oil industry need a large
investment in human capital? The technology in
the oil industry is very complicated.
24. One of Iran’s biggest problems with their staterun oil industry is inefficiency and poor
organization.
25. If a country does not invest in its human
capital, how can it affect the country’s GDP?
GDP may go down because poorly trained
workers will not be able to do their jobs as well.
26. What are capital goods? the factories and
machines used to make goods
27. Israel has invested heavily in capital goods in
all of the following areas EXCEPT oil
28. Why are oil and gas such valuable natural
resources? Industrial countries depend on oil
and gas as their energy supply.
29. How much of the oil used by the U.S. has to be
imported every day? 50%
30. How has the Saudi government used its
national wealth to change the country? The
government has paid for improvements in
transportation, education, health care, and
agriculture.
31. How do Iran and Saudi Arabia benefit from
belonging to OPEC? OPEC keeps the price of
oil high on the world market.
32. What is an entrepreneur? someone who is
willing to take a risk to begin a new business