ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -All economies must answer basic questions like what goods and services to produce, how to produce these goods and services, and how to distribute the goods and services – using their scarce resources.

Detailed explanation-2: -An economic system is any system of allocating scarce resources. 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.

Detailed explanation-3: -Key Takeaways Market economies utilize private ownership as the means of production and voluntary exchanges/contracts. In a command economy, governments own the factors of production and set prices and production schedules. In a market economy, prices are set by supply and demand.

Detailed explanation-4: -Economics is the study of the production, distribution, and consumption of goods and services. Economists address these three questions: (1) What goods and services should be produced to meet consumer needs? (2) How should they be produced, and who should produce them? (3) Who should receive goods and services?