Intro part 3: Basic econimics

Question 1

Basic economic question 1

Answer 1

-What/how much to produce

all economies must choose what particular goods and services and what quantities they wish to produce.

Question 2

Basic economic question 2

Answer 2

-How to produce(includes methods of production)

All economies must make choices on how to use their resources in oder to produce good and services.

Question 3

Basic economic question 3

Answer 3

-For whom to produce?

All economies must make choices on how the good and services produced are to be distributed among the populations.

Question 4

Resource allocation

Answer 4

Refers to signing available resources of factor of production, to specific use choses among many possible alternative - answering the economic question 1

Question 5

Distribution of income

Answer 5

Concerned with how much of the economies total income different individuals receive.

Question 6

Redistribution of income

Answer 6

changing the distribution of income , given rise to a new distribution.

Question 7

Market method

Answer 7

Resources are owned by private entities - resource allocation based on the Price.

Question 8

Command method

Answer 8

Resources are owned by the Government - decision are made through legislation-> which deside resource allocation

Question 9

Economic systems

Answer 9

Free market( which is not prevalent nowadays)

Mixed market( Ascribed by almost all the countries)

Planned( Ussr, Cuba and North Korea)

Question 10

cambridge economics book

Answer 10

pg 15-23