Economics: economic systems, trade, and choices, Eastern Hemisphere (grade 7)

The Silk Road was a web of land routes between China and lands to the west. Traders carried goods that were worth a lot for their weight, like silk, porcelain, and spices. Heavy, cheap goods like grain weren't worth the long trip.

Traders carried more than goods. Buddhism spread from India into China along trade routes. Diseases, like the plague, spread too.

On the Indian Ocean, monsoon winds blow one way part of the year and the other way the rest. Traders sailed out on one monsoon and home on the next.

Corn and potatoes came from the Americas. They weren't on the Silk Road at all.

Barter is trading goods straight across, like a goat for shoes. The problem is you must find someone who has what you want and also wants what you have.

Coins solve that. You can sell to one person and buy from another.

But coins must hold their value. Some Roman emperors put less silver in each coin to make more coins. Each coin was worth less, so sellers asked for more coins. Prices rose. This is inflation.

Profit is the money earned from a sale minus the costs. If a merchant buys silk for 40 coins and sells it for 65, with no other costs, the profit is 25 coins.

Long trips have costs: camels, guards, food, and tolls. These come out of the profit too.

In ancient Egypt, the pharaoh's officials collected grain and decided how to store and share it. When rulers make these choices, it is like a command economy.

In medieval Europe, many people lived on manors. Serfs farmed a lord's land and gave him part of their crops. In return, the lord gave them a place to live and farm, and protection. Serfs were tied to the land and usually could not leave.