Individual producers and consumers provide the answers to the 3 basic economic questions. In a market economy who answers the 3 basic economic questions? Individual producers and consumers. Relies on profit motive, economic competition and supply/demand forces.
Who answers the questions in a market economy?
A market economy is the opposite of a command economy. In a market economy, each person answers the 3 basic questions (what, for whom, how). People make decisions for themselves.
Who answers the economic questions in a mixed economy?
A mixed economy combines elements of tradi- tional, market, and command economic models to answer the three basic economic questions. In these economies the government owns or controls nearly all the factors of production.
Who answers the economic questions in a free market economy?
In a free market economy, the factors of production are privately owned, and individuals decide how to answer the three economic questions.
Who or what answers the basic economic questions in a command economy?
Command economy relies on government officials to answer the three basic economic questions. Officials called – central planners/ decide on what will be produced and made. Individuals have little or no say in economic choices. Command economies don’t exist.
What are the 3 economic questions?
- 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?
What are the 5 economic questions?
- What will be produced?
- How will goods and services be produced?
- Who will get the output?
- How will the system accommodate change?
- How will the system promote progress?
How are the 3 basic economic questions answered in a traditional economy?
Three basic questions must be answered: a) What goods and services must be produced? b) How will these goods and services be produced? ... economies answer the economic questions of (1) what to produce, (2) how to produce, and (3) for whom to produce .
How are the 3 basic economic questions answered in a mixed economy?
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. ... Most economies are mixed economies that lie between these two extremes.
What are the economic models?
An economic model is a simplified description of reality, designed to yield hypotheses about economic behavior that can be tested . ... Economic models generally consist of a set of mathematical equations that describe a theory of economic behavior.
(1) what to produce, (2) how to produce, and (3) for whom to produce . What is produced? based on custom and the habit of how such decisions were made in the past.
What are the three main questions of economics addresses who should?
One of the three main questions of economics addresses who should: produce goods and services . market goods and services. receive goods and services.
What is a disadvantage of a market economy?
While a market economy has many advantages, such as fostering innovation, variety, and individual choice, it also has disadvantages, such as a tendency for an inequitable distribution of wealth, poorer work conditions, and environmental degradation .
How is the basic question what gets answered in a market economy?
In a capitalist economy, the first question is answered by consumers as they spend their money . The second question is answered by producers as they compete for sales and profits. The third question is answered by those who have the money to buy the product.
What are three goods examples?
- freshwater.
- fish for fishing.
- wildlife to hunt.
- timber from trees.
- wildflowers to pick.
- fresh air.
- park benches.
- coal.
What are the three main types of economies?
There are three main types of economies: free market, command, and mixed . The chart below compares free-market and command economies; mixed economies are a combination of the two. Individuals and businesses make their own economic decisions. The state’s central government makes all of the country’s economic decisions.
