The three basic economic questions.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 3, Problem 1P

To determine

The three basic economic questions.

Expert Solution & Answer

Explanation of Solution

The three basic economic questions that every economy face is:

What to produce?
How to produce?
Whom to produce?

In the planned economy (command economy) the central economic questions what, how and whom to produce is resolved by the central planned authority or the government. The government controls all the factors of production (land, labor, capital, and entrepreneurship) and has full control over the economy. While in the market economy, the decisions are based on the market forces. Under this economy, firms or businesses are controlled by private hands and decisions related to determining the price of the commodity, size of quantity etc. is determined by the aggregate demand and supply in an economy.

Economics Concept Introduction

Free Market Economy: It is a system of the market in which prices of commodities are determined by the open market. Basically, demand and supply forces of market play important role in the determination of prices. The free market economy is very competitive, and industries are perfectly competitive. Hence allocation of resources occurs very efficiently.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

A linear programming computer package is needed. As part of the settlement for a class action lawsuit, Hoxworth Corporation must provide sufficient cash to make the following annual payments (in thousands of dollars). Year 1 2 3 4 5 6 Payment 170 195 220 265 295 440 The annual payments must be made at the beginning of each year. The judge will approve an amount that, along with earnings on its investment, will cover the annual payments. Investment of the funds will be limited to savings (at 4% annually) and government securities, at prices and rates currently quoted in The Wall Street Journal. Hoxworth wants to develop a plan for making the annual payments by investing in the following securities (par value = $1,000). Funds not invested in these securities will be placed in savings. Security Current Price Rate (%) Years to Maturity 1 $1,055 6.750 3 2 $1,000 5.125 4 Assume that interest is paid annually. The plan will be submitted to the judge and, if approved,…

On the 1st of April 2018, the South African National Treasury increase the value-added tax rate from 14% to 15%. This policy change had a wide-ranging impact on society. Discuss some of the benefits and drawbacks of making use of this type of tax to generate government revenue and what we may expect in terms of its impact on inflation and GDP growth within the economy. Please use some of the economics graphs to explain some scenarios

Eskom is South Africa’s monopoly power producer which the majority of South Africans depend on. Suppose there is extensive deregulation in the power industry. What is the impact of this deregulation on the industry? Help me on discussing the new market structure as well as the impact on supply and demand. Use the relevant diagrams.

Answer 2

Question

Chapter 3, Problem 1P

To determine

The three basic economic questions.

Expert Solution & Answer

Explanation of Solution

The three basic economic questions that every economy face is:

What to produce?
How to produce?
Whom to produce?

In the planned economy (command economy) the central economic questions what, how and whom to produce is resolved by the central planned authority or the government. The government controls all the factors of production (land, labor, capital, and entrepreneurship) and has full control over the economy. While in the market economy, the decisions are based on the market forces. Under this economy, firms or businesses are controlled by private hands and decisions related to determining the price of the commodity, size of quantity etc. is determined by the aggregate demand and supply in an economy.

Economics Concept Introduction

Free Market Economy: It is a system of the market in which prices of commodities are determined by the open market. Basically, demand and supply forces of market play important role in the determination of prices. The free market economy is very competitive, and industries are perfectly competitive. Hence allocation of resources occurs very efficiently.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 3, Problem 1P

To determine

The three basic economic questions.

Expert Solution & Answer

Explanation of Solution

The three basic economic questions that every economy face is:

What to produce?
How to produce?
Whom to produce?

In the planned economy (command economy) the central economic questions what, how and whom to produce is resolved by the central planned authority or the government. The government controls all the factors of production (land, labor, capital, and entrepreneurship) and has full control over the economy. While in the market economy, the decisions are based on the market forces. Under this economy, firms or businesses are controlled by private hands and decisions related to determining the price of the commodity, size of quantity etc. is determined by the aggregate demand and supply in an economy.

Economics Concept Introduction

Free Market Economy: It is a system of the market in which prices of commodities are determined by the open market. Basically, demand and supply forces of market play important role in the determination of prices. The free market economy is very competitive, and industries are perfectly competitive. Hence allocation of resources occurs very efficiently.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 3, Problem 1P

To determine

The three basic economic questions.

Expert Solution & Answer

Explanation of Solution

The three basic economic questions that every economy face is:

What to produce?
How to produce?
Whom to produce?

In the planned economy (command economy) the central economic questions what, how and whom to produce is resolved by the central planned authority or the government. The government controls all the factors of production (land, labor, capital, and entrepreneurship) and has full control over the economy. While in the market economy, the decisions are based on the market forces. Under this economy, firms or businesses are controlled by private hands and decisions related to determining the price of the commodity, size of quantity etc. is determined by the aggregate demand and supply in an economy.

Economics Concept Introduction

Free Market Economy: It is a system of the market in which prices of commodities are determined by the open market. Basically, demand and supply forces of market play important role in the determination of prices. The free market economy is very competitive, and industries are perfectly competitive. Hence allocation of resources occurs very efficiently.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 3, Problem 1P

To determine

The three basic economic questions.

Expert Solution & Answer

Explanation of Solution

The three basic economic questions that every economy face is:

What to produce?
How to produce?
Whom to produce?

In the planned economy (command economy) the central economic questions what, how and whom to produce is resolved by the central planned authority or the government. The government controls all the factors of production (land, labor, capital, and entrepreneurship) and has full control over the economy. While in the market economy, the decisions are based on the market forces. Under this economy, firms or businesses are controlled by private hands and decisions related to determining the price of the commodity, size of quantity etc. is determined by the aggregate demand and supply in an economy.

Economics Concept Introduction

Free Market Economy: It is a system of the market in which prices of commodities are determined by the open market. Basically, demand and supply forces of market play important role in the determination of prices. The free market economy is very competitive, and industries are perfectly competitive. Hence allocation of resources occurs very efficiently.

Answer 6

Chapter 3, Problem 1P

To determine

The three basic economic questions.

Expert Solution & Answer

Explanation of Solution

The three basic economic questions that every economy face is:

What to produce?
How to produce?
Whom to produce?

In the planned economy (command economy) the central economic questions what, how and whom to produce is resolved by the central planned authority or the government. The government controls all the factors of production (land, labor, capital, and entrepreneurship) and has full control over the economy. While in the market economy, the decisions are based on the market forces. Under this economy, firms or businesses are controlled by private hands and decisions related to determining the price of the commodity, size of quantity etc. is determined by the aggregate demand and supply in an economy.

Economics Concept Introduction

Free Market Economy: It is a system of the market in which prices of commodities are determined by the open market. Basically, demand and supply forces of market play important role in the determination of prices. The free market economy is very competitive, and industries are perfectly competitive. Hence allocation of resources occurs very efficiently.

Answer 7

Chapter 3, Problem 1P

To determine

The three basic economic questions.

Answer 8

Expert Solution & Answer

Explanation of Solution

The three basic economic questions that every economy face is:

What to produce?
How to produce?
Whom to produce?

In the planned economy (command economy) the central economic questions what, how and whom to produce is resolved by the central planned authority or the government. The government controls all the factors of production (land, labor, capital, and entrepreneurship) and has full control over the economy. While in the market economy, the decisions are based on the market forces. Under this economy, firms or businesses are controlled by private hands and decisions related to determining the price of the commodity, size of quantity etc. is determined by the aggregate demand and supply in an economy.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Free Market Economy: It is a system of the market in which prices of commodities are determined by the open market. Basically, demand and supply forces of market play important role in the determination of prices. The free market economy is very competitive, and industries are perfectly competitive. Hence allocation of resources occurs very efficiently.

Answer 12

Ch. 3 - Prob. 1P Ch. 3 - Prob. 2P Ch. 3 - Prob. 3P Ch. 3 - Prob. 4P Ch. 3 - Prob. 5P Ch. 3 - Prob. 6P Ch. 3 - Prob. 7P Ch. 3 - Prob. 8P Ch. 3 - Prob. 9P Ch. 3 - Prob. 10P

The three basic economic questions.

The three basic economic questions.

Explanation of Solution

Want to see more full solutions like this?

Chapter 3 Solutions