'The Three Basic Economic Questions\r'

'The Three Basic stinting Questions 1. What to mystify? what items to receive and how overmuch of sever bothy item to produce using its deep inputs in the most efficient manner. 2. How to Produce? One the decision has been made regarding what to produce. each country must choose which resources creative inputs go forth be holdd and in what combinations3. For Whom to Produce? Should the productive takingss be distributed establish on social customs duty, in-person wealthiness and ownership, or mandated by the disposal? mandated government- chinaware no youtube or facebook (social customs- north korea the worst)Basic sparing Systems Traditional Economy One in which economical decisions depend upon social customs and rarely changes from generations to generation. in these societies, religion and refining are more(prenominal) important than personal wealth and material possessions. ( north korea, india marriage) conncected to for whom to produce in traditionMarket Econo my One in which economic decisions are based on private ownership, where any(prenominal)ones are free to take their own self interest. This system is very much referred to as capitalism. individuals use their incomes to purchase goods and services. The more income one earns, the more purchasing bureau they have.Command Economy One in which all productive inputs are owned by the government and central planners within that government decide what items to produce and how much will be produced; how it will be produced and how output will be distributed based upon evaluate future needs of the saving. ex. China absolute majority AfricaMixed Economy One that combines aspects of a mart economy and a command econmy; the economy uses both markets and government to make decisions. close countires today fall under the conflate eonomly definition, however in varying degrees amongst private and public sector limit ex. Sweden, Canada, USA Economic SystemAdvantagesDisadvantagesTradit ional Stability Emphasizes on spiritual and cultural aspects of lifePoverty Lack of individual freedomsMarket Individual consumers determine what is produced and ultimately how much they are willing to pay.Encourages innovation and entrepreneurshipInstability in output due to changes in prices and/ or employment levels Private markets do not always consider the needs of confederacy as a whole e.g. dispossessed shelters. If income is distributed based solely on earnings, some individuals might not earn complete to obtain the basic necessities of life. CommandMore even dispersal of incomeCentral planners can focus on economic growth by directing resources in a specific direction.Lack of individual freedomsCentral provision difficulties and errors in judgmentInefficient use of resources due to the wishing of profit to motivate the efficient use of resources\r\n'