ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What to produce, why to produce, when to produce?
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What is your opportunity cost, what economic resources are needed, why should these resources be used?
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What to produce, how to produce, and for whom to produce?
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None of the above
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Detailed explanation-1: -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-2: -In a command economy, what goods and services are produced, how they are produced, and for whom they are produced are all questions answered by government planning.
Detailed explanation-3: -There are various basic economic questions. The first is what to produce, i.e., what should be produced in an area with limited resources. Secondly, is how to produce, i.e., the resources used in the production. Lastly, who consumes what has been produced, i.e., the person who acquires the product.
Detailed explanation-4: -Traditional economies rely on habit, custom, or ritual to decide what to produce, how to produce it, and to whom to distribute it. In a centrally planned economy the central government makes all decisions about the production and consumption of goods and services.