ECONOMICS - the 4 basic economic questions and economic systems

• What to Produce

• How much to produce?

• How to produce

• For Whom to produce?

The 4 Basic Economic Questions

What to produce?

deciding which goods and services to be made

• consumer demand

• availability of resources

• government policies and regulations

factors influencing the decision regarding what product to make

How much to produce?

determining the quantity of goods and services

• market demand and consumer needs

• production capacity and resource availability

factors influencing the decision of how much to produce

How to produce?

Choosing the production method

labor-intensive vs. machine-intensive

two types of production method

• technology and available capital

• cost of labor and raw materials

• environmental impact and sustainability

factors influencing the decision of how to produce

For whom to produce?

deciding who gets the goods and services produced

• income levels and purchasing power

• government policies and wealth distribution

• market system (capitalism, socialism, mixed economy)

factors influencing the decision for whom to produce

capitalism, socialism, and mixed economy

3 market systems

Traditional economy

this system runs on customs such as traditions and beliefs

typically passed down through generations

In traditional economy, economic roles are typically ________

Pure Command Economy

In this system, the government makes all economic decisions

state-owned

In a pure command economy, resources and industries are ______

Pure market economy

In this system, decisions are driven by consumers and businesses

free competition and ownership

Pure market economy feature _______ and ________

Traditional Economy

Which economic system does indigenous communities who rely on agriculture, hunting, or barter systems belong to?

Pure command economy

North Korea, former Soviet Union are ecamples of ?

Pure market economy

United states and singapore follow which economic system?