The three basic economic questions.

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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.

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With your team I would like you to complete the following questions after please post your replies and we will discuss in class Choose a financial instrument or market (such as stocks, bonds, insurance, cash, gold, bitcoin). Explain how investments work for the individual investor mainly yourself. With the current market upheaval and uncertainty what would you and your team consider the best options for investment. Consider the idea of short term investing vs long term investing, laddering, safe haven, liquidity, and risk) Consider Roth IRA vs traditional IRA, ETF's, CD's, Mutual Funds. Always consider taxes and inflation your return should always be greater then inflation and taxes.

Short Description Fiscal Policy Graph Details Shown is a Fiscal Policy diagram with the variable Real GDP (billions of dollars) on the x-axis and the variable Price Level on the y-axis. The x-axis is scaled from 0 to 800 billion dollars with an increment of 40 billion dollars, and the y-axis is scaled from 30 to 150 units with an increment of 5 units. Object Details On the graph we have:Four Line Objects:An upward sloping Aggregate Supply, AS line with two endpoints:Point 1 at (160, 70)Point 2 at (720, 140)A downward sloping Aggregate Demand, AD1 line with two endpoints:Point 1 at (80, 110)Point 2 at (640, 40)A vertical Long-run Aggregate Supply, LRAS with two endpoints:Point 1 at (400, 145)Point 2 at (400, 30)A downward sloping Aggregate Demand, AD line with two endpoints:Point 1 at (720, 60)Point 2 at (160, 130)Two Reference Points:Lines AS, AD, and LRAS intersect at (400, 100)Lines AS and AD1 intersect at (280, 85) a. How much does aggregate demand need to change to restore the…

Fiscal Policy Graph Details Shown is a Fiscal Policy diagram with the variable Real GDP (billions of dollars) on the x-axis and the variable Price Level on the y-axis. The x-axis is scaled from 0 to 1000 billion dollars with an increment of 50 billion dollars, and the y-axis is scaled from 0 to 180 units with an increment of 10 units. Object Details On the graph we have:Four Line Objects:An upward sloping Aggregate Supply, AS line with two endpoints:Point 1 at (200, 40)Point 2 at (800, 160)A downward sloping Aggregate Demand, AD line with two endpoints:Point 1 at (200, 160)Point 2 at (800, 40)A downward sloping Aggregate Demand, AD1 line with two endpoints:Point 1 at (350, 170)Point 2 at (900, 60)A vertical Long-run Aggregate Supply, LRAS line with two endpoints:Point 1 at (500, 170)Point 2 at (500, 0)Two Reference Points:Lines AS and AD1 intersect at (600, 120)Lines AS, AD, and LRAS intersect at (500, 100) a. How much does aggregate demand need to change to restore the…

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.

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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.

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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

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