Three Basic Economics Questions
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Write a 2-3 page thorough analysis of the three basic economic questions along with an analysis of the centralized command and control system, the price system, and the mixed economic system. Remember to cite your research and do not plagiarize.
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This posting gives you a step-by-step explanation of three basic economics questions. The response also contains the sources used.
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The first basic economic question is "what to produce?". This is concerned with how scarce resources are allocated. This allocation question is answered by the economic system. The economic system allocates productive resources in the form of land, labor, and capital. Land includes natural resources, real estate, and raw materials. Labor determines the work that is done by the people and the their earnings in the form of pay. Capital includes physical capital by way of buildings, equipment, and tools. It also includes human resources, including the quality of education, and training on the job (a). In most economic systems the production of some items is determined by supply and demand, whereas some essential commodities such as food items are subsidized and controlled by the government.
In a centralized command and control system the question of what to produce is determined by the government. In a price system what is produced is determined by the market forces. In a mixed system, some aspects of what is produced is determined by the ...
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