1. ANSWERING THE 3 ECONOMIC QUESTIONS
BY: LISA ENNIS
8TH period

2. TERMS TO KNOW
Economic system- the method used by a society to produce and distribute goods and services
Factor payments- income people receive for supplying factors of production
Safety net- government programs that protect people experiencing unfavorable economic conditions
Standard of living- level of economic prosperity

3. TERMS TO KNOW
Traditional economy- economic system that relies on habit, custom, or ritual to decide what to produce, how to produce it, and to whom to distribute it. Ex: boys take occupations of their fathers
Market economy- decisions are made by individuals and are based on exchange, or trade. Ex: free markets
Centrally planned economy- the central government makes all the decisions on the production and consumption of goods and services
Command economy- a central authority is in command of the economy; centrally planned economy
Mixed economy- market based economic system with limited government involvement

4. The Key Economic Questions
What goods and services should be produced?
How should these goods and services be produced?
Who consumes these goods and services?

5. What goods and services should be produced?
Each society must decide what to produce in order to satisfy needs and wants
The more you produce of some goods and services the less you can produce of other goods and services (tradeoffs and opportunity cost)
Basic needs: food, shelter, clothing; wants: luxury items; services: education, health care, defense

6. How should these goods and services be produced?
There are countless ways to create all of the things we want and need, which all require capital, land, and labor
Ex: size and organizations of facilities, resources to use, time and effort communication

7. Who consumes these goods and services?
Societies must decide how to distribute the available goods and services
Ex: choices in products, value or price to products, access to services

8. Goals and values to answer questions
Economic efficiency-make the most of resources
Economic freedom- from government intervention from the production and distribution of goods and services
Economic equity- fair distribution of wealth
Economic growth and intervention- innovation leads to economic growth, and economic growth leads to a higher standard of living
Other goals- societies pursue additional goals, such as environmental protection

9. Review! What are the 3 economic questions?
The more you produce of some goods and services the less you can produce of other goods and services (tradeoffs and opportunity cost) is which of the 3 questions?
Give an example of each question!
____ Factor Payments
____Safety Net
income people receive for supplying factors of production
government programs that protect people experiencing unfavorable economic conditions

10. Economies ReviewVideo!! 