ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Who’s on first? What’s on second? Why is he on third?
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Should we farm more, fund healthcare, or build a park?
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What to produce? How to produce? For whom to produce?
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What do I buy? How much do I save? How much do I give?
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Detailed explanation-1: -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?
Detailed explanation-2: -That is to produce goods for the poor or for the rich. Since the resources are scarce, the economy has to decide for whom it will produce goods. The goods are produced according to the paying capacity of the people. And this capacity depends on the income level of the people which is their purchasing power.
Detailed explanation-3: -Students will read and take notes on the three main questions of economics. These are what to produce, how to produce it, and who to produce it for.
Detailed explanation-4: -This helps to understand which good or services are required in the society (what to produce?) with which technique these are to be made (how to produce?) and who would consume these goods( for whom to produce?).
Detailed explanation-5: -An economic system is the method used by a society to produce and distribute goods and services. Traditional economies rely on habit, custom, or ritual to decide what to produce, how to produce it, and to whom to distribute it.