Podcast
Questions and Answers
What are the three basic economic questions?
What are the three basic economic questions?
What is an economic system?
What is an economic system?
The structure of methods and principles a society uses to produce/distribute goods/services.
What are factor payments?
What are factor payments?
The income people receive in return for supplying factors of production.
What is profit?
What is profit?
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What is a traditional economy?
What is a traditional economy?
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What is a command economy?
What is a command economy?
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What is a market economy?
What is a market economy?
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What is a mixed economy?
What is a mixed economy?
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What are common economic social goals?
What are common economic social goals?
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What is the standard of living?
What is the standard of living?
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What is innovation?
What is innovation?
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What is a safety net?
What is a safety net?
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Study Notes
Basic Economic Questions
- Three fundamental questions determine how economies function:
- What goods/services should be produced?
- How should they be produced?
- Who consumes these goods/services?
Economic System
- Refers to the set of methods and principles utilized by a society for producing and distributing goods/services.
Factor Payments
- Income received by individuals supplying factors of production, which include land, labor, and capital.
Profit
- The profit is the difference between a business's total revenue and its expenses.
Traditional Economy
- An economic structure that relies on customs, habits, or rituals to address the basic economic questions, typically characterized by a lack of innovation.
Command Economy
- An economy where the government exerts control over production and distribution, emphasizing security and equity but lacking freedom and growth opportunities.
Market Economy
- A system where consumers and producers make decisions that drive the economy, allowing for greater freedom and flexibility.
Mixed Economy
- Combines elements of both market and command economies; the government provides some public goods while allowing consumer and producer choices in other areas.
Economic Social Goals
- Key objectives that guide economic systems include:
- Freedom
- Growth
- Efficiency
- Equity
- Security
- Stability
- Employment
- Environmental protection
Standard of Living
- A measure of prosperity that reflects the quality and quantity of goods and services available to individuals.
Innovation
- The process of creating and introducing new goods/services into the market, playing a crucial role in economic advancement.
Safety Net
- Programs designed to protect individuals during unfavorable economic conditions, providing support in times of need.
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Description
Test your knowledge of the three basic economic questions with these flashcards. Learn about the economic system and factor payments in the context of production and consumption. A great way to reinforce your understanding of fundamental economic concepts.
