A market economy is the opposite of a command economy. In a market economy, each person answers the 3 basic questions (what, for whom, how). People make decisions for themselves.
What are the three questions every economy must answer and explain how a market economy answers these questions?
In order to meet the needs of its people, every society must answer three basic economic questions: What should we produce? How should we produce it? For whom should we produce it?
How are the three basic economic questions answered?
In order to meet the needs of its people, every society must answer three basic economic questions: What should we produce? How should we produce it? For whom should we produce it? Furthermore, what societal values play a role in how the three basic economic questions are answered in the United States?
How is the third economic decision answered in a free market economy?
For whom to produce is the third economic decision as towho will be receiving goods and services in the free market economy system is answered through the price system is answered through the price system. Goods and services are obtained by anyone who can afford them. Goods and services are distributed among the residents of the country.
How are economic systems described in Unit 3?
Economic Systems UNIT THREE NOTES 2. Economic Systems <ul><li>An economic system describes how a country’s economy is organized </li></ul><ul><ul><li>Because of the problem of scarcity , every country needs a system to determine how to use its productive resources </li></ul></ul><ul><li>An economic system must answer 3 basic questions… </li></ul>
What are the three factors of a free market economy?
What to produce depends on three factors which is profit motive, price system and consumer sovereignty. Competition among producers will force the producer to come up with newer and more innovative ideas.
