Three basic Economic questions Flashcards
Identify what is the term used to describe how countries make their decisions.
The way that countries make decisions is what we call their economic system.
Explain all the key features of the economic systems.
The first key feature is who makes the decision such as governments, businesses and/or consumers. The second key feature is ownership of resources referring to who owns the land, labour, capital.
Describe ‘What to produce’
What to produce explains the decision of what should be created with the limited resources we have in the world (for example: if resources are limited, should the government invest into making housing for homeless people or invest into the Australian defense force?)
Describe ‘How to produce’
How to produce encourages the questioning of how to create the most efficient way to manufacture a desired outcome (how should we obtain crude oil to meet our energy needs?)
Describe ‘For whom to produce’
For whom to produce implies how a society determines how to distribute the goods and services and who gets priority.(who gets to receive the limited supply of flu vaccinations?)
