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Unit 2C: Africa’s economics

Unit 2C: Africa’s economics. Study Guide Review. SS7E1. Compare how traditional, command, and market economies answer the basic economic questions: WHAT TO PRODUCE, HOW TO PRODUCE, & FOR WHOM TO PRODUCE. WE HAVE HAD THIS STANDARD ALREADY…IT IS REVIEW!!!!. Number 1: The Chart. Traditional.

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Unit 2C: Africa’s economics

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  1. Unit 2C: Africa’s economics Study Guide Review

  2. SS7E1 • Compare how traditional, command, and market economies answer the basic economic questions: WHAT TO PRODUCE, HOW TO PRODUCE, & FOR WHOM TO PRODUCE. • WE HAVE HAD THIS STANDARD ALREADY…IT IS REVIEW!!!!

  3. Number 1: The Chart Traditional Command • Decisions made from customs and traditions • Goods are usually produced for personal use • Subsistence Farmers • BARTERING & TRADING IS THE STANDARD PRACTICE • EVERYTHING is planned by the government • NO PRIVATE BUSINESS • NO ENTREPRENEURS

  4. Number 1: The Chart Market • The “market” makes the decisions • Buyers are the market • Sellers are the market • Entrepreneurs are the market • Individuals experience profits and losses

  5. #2: Why are most countries MIXED? • All countries have some amount of government control. • All countries have some amount of private ownership

  6. #3: What is an ECONOMIC CONTINUUM? • A scale that SHOWS where a country’s economic system lies between PURE MARKET & PURE COMMAND COMMAND mARKET

  7. #4: Compare & Contrast the economic systems of Nigeria & South Africa. South Africa Nigeria • Some government control • Strong economy • Goods: platinum, diamonds, gold • Exports: gold, diamonds, minerals • GDP/capita: $10,700 • Unemployment: 23.4% • Economic Freedom Index: 70- MODERATELY FREE • Poorly organized • Some private ownership • Goods: Oil & Petrochemicals • Exports- Oil & Petrochemicals • GDP/capita:$2,400 • Unemployment: 21% • Economic Freedom Index: 116- MOSTLY UNFREE

  8. #5. What type of economic system do both countries have? • Mixed • #6. What is S. Africa’s main economic problem? • Unemployment- almost ¼ of the population is not working

  9. #7. Where are they on the continuum? P U R E C O M M A N D P U R E M A R K E T S O U T H A F R I C A 7 0 N I G E R I A 1 1 6 U S A 10 0 179

  10. Another continuum

  11. #7. Why put them there? • South Africa- has more private ownership and less government control • Nigeria- just beginning to allow private ownership • Problems with government corruption- Oil industry

  12. SS7E2: TRADE • #8. 3 TYPES OF TRADE BARRIERS: TARIFF, QUOTA, & EMBARGO • #9. How are they different? They all limit trade but in different ways • #10. Importance of specialization in international trade- NO country is COMPLETELY self-sufficient; they can’t produce ALL goods and services they need so they have to TRADE with each other

  13. SS7E2: TRADE • #11. Voluntary Trade- It promotes SPECIALIZATION which usually leads to better production and more profits; this increases the GDP • #12. Tariffs helping the economy- Tariffs discourage people/businesses from buying imported goods b/c the prices will be higher from tariffs. Tariffs, therefore, encourage buying domestic goods for lower prices

  14. SS7E2: TRADE • #13. Embargoes against South Africa- The United Nation’s members STOPPED trade with South Africa until they ENDED APARTHEID. • SS7E2b • #14. CURRENCY- is money • #15. EXCHANGING CURRENCIES- is needed to make sure that the money has a dependable value and the trade is fair

  15. SS7E3a Human Capital • #16. Investing in HUMAN CAPITAL- by training and educating the workers • #17. Effects of investing in human capital on GDP- the more countries invest in training and skills of workers, the higher the profits; the higher the profits, the more valuable to goods and services; this INCREASES the GDP. • #18. South Africa invests in HUMAN CAPITAL- by making sure the mine and electronics workers are well trained.

  16. SS7E3a • #19. Why SHOULD Nigeria have a strong economy? b/c they have a lot of oil and a system of education so the GDP/capita should be higher • #20. Not investing in Human Capital- if workers are unskilled they will not make a good income and will not spend money on buying goods and services~ which puts money into the economy

  17. SS7E3b: Capital Goods • #21. South Africa’s investment in capital goods- spending money on new technology and equipment for mining and the auto industry • #22. Nigeria’s investment in capital goods- they have spent SO MUCH money for new technology for oil production that they have not spent $ on agriculture. 70% of the people work in agriculture and live on less than $1/day

  18. Capital Goods • #23. Importance of investing in capital goods- good technology increases production; more production increases profits; higher profits increase the GDP • #24. Nigeria’s investment in capital goods- has left no $ for MOST of the people; poor food supply and housing

  19. SS7E3c • #25. Uses of Uranium- nuclear weapons, nuclear energy, photographic chemicals • #26. The World’s Uranium Supply- 20% is in Africa • #27. Negative Effects of Nigeria’s economic development- Oil has not strengthened the economy • #28. Why?- most of Nigeria’s money goes into the oil industry. 80% of the people are not in the oil business

  20. Africa’s Resources • #29. Africa’s most valuable resources- Diamonds and gold • #30. Why haven’t S. Africa’s diamonds been ‘bad’? Strict regulation of the diamond business- no ‘blood diamonds’ from S. Africa • #31. Effects of Conflict Diamonds- Conflict diamonds are sold illegally to provide weapons for rebel groups / conflicts/ wars; supports chaos and killing

  21. RESOURCES • #32. South Africa’s gold- 40% of the world’s gold is found there • #33. Effects of S. Africa’s gold- They have been able to use the $ to provide some resources for people but not enough for AIDS/HIV • #34. Entrepreneurs- takes financial risks to have new business; THEY reap profits & losses of the risks • #35. Influence of entrepreneurs influence economic growth- they create new jobs which increases the GDP, unless the business fails

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