UTILITY AND APPLICATION OF APPLIED ECONOMICS TO SOLVE BASIC ECONOMIC ISSUES AND PROBLEMS Flashcards
what are the 4 dominant basic economic problems?
what to produce
how to produce
from whom to produce
what provision should be made for economic growth
the system must determine the desires of the people
what to produce
goods and services must be based on the needs of the consumers
what to produce
the system must select the proper combination of economic resources in producing the right amount of output
how to produce
the quality of output must come first before the quantity
how to produce
this has something to do with the distribution of goods that are produced and for whom shall they be distributed properly
from whom to produce
both an individual and a society would not like to use all its scarce resources for current consumption only
what provision should be made for economic growth
the means through which society determines the answers to the basic economic problems mentioned
economic system
4 types of economic system
traditional, command, market, mixed
type of economic system where decisions are based on traditions and practices upheld over years and passed on from generation to generation
traditional economy
type of economic system where methods are stagnant and are therefore not progressive
traditional economy
authoritative system wherein decision-making is centralized in the government or a comment committee
command economy
economic system where decisions are imposed on the people who do not have a say in what goods are to be produced
command economy
most democratic form of economic system
market economy
economic system that is based on the workings of demand and supply, decisions are made on what goods and services to produce
market economy
