Because of scarcity every society or economic system must answer these three (3) basic questions:

In order to meet the needs of its people, every society must answer three basic economic questions: What should we produce? How should we produce it? For whom should we produce it?

Brieflydiscuss the differences in how centrally planned, market and mixed economiesanswer these questions. The three economic questions that every society must answer are What goods andservices will be produced, How will the goods and services be produced and Who willreceive the goods and services produced.

• What to produce? ➢ What should be produced in a world with limited resources?
• How to produce? ➢ What resources should be used?
• Who consumes what is produced? ➢ Who acquires the product?

Economic systems answer three basic questions: what will be produced, how will it be produced, and how will the output society produces be distributed? There are two extremes of how these questions get answered.

There are four types of economies:

• Pure Market Economy.
• Pure Command Economy.
• Traditional Economy.
• Mixed Economy.

Key Takeaways. Four key economic concepts—scarcity, supply and demand, costs and benefits, and incentives—can help explain many decisions that humans make.

National economic goals include: efficiency, equity, economic freedom, full employment, economic growth, security, and stability. Economic goals are not always mutually compatible; the cost of addressing any particular goal or set of goals is having fewer resources to commit to the remaining goals.

Goals. In thinking about the overall health of the macroeconomy, it is useful to consider three primary goals: economic growth, full employment (or low unemployment), and stable prices (or low inflation). Economic growth ultimately determines the prevailing standard of living in a country.

ECONOMIC GOALS The following is a list of the major economic goals: 1) economic growth, 2) price level stability, 3) economic efficiency, 4) full employment, 5) balanced trade, 6) economic security, 7) equitable distribution of income, and 8) economic freedom.

There are four major goals of economic policy: stable markets, economic prosperity, business development and protecting employment.

“The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”

Capitalism