Three Fundamental Economic Questions Paper

1.For each of the three fundamental economic questions, explain why it is important for society to answer that question.

What goods and services are to be produced?

Every society must be able to decide to produce to meet the needs of each individual. If much of a product occurs, less can produce another. Every society has to meet basic needs, which are: clothing, shelter, food, etc.

How should these goods and services be produced?

There are countless ways to create all the resources we need and want, which require capital labor and land. For example, size and organizations of facilities, resources to use, time and effort communication.

Who consumes these goods and services?

Societies should be able to decide how to distribute available resources and services.

Economic stability- means that the goods and services we count on—electricity on demand, food and clothing in the stores—are there when we want them.
Economic equity- the fairness with which an economy distributes its resources and wealth. Economic security- seeks to provide its less fortunate members with the support they need in terms of food, shelter, and health care to live decently. Full employment- a condition in which everyone who wants to work can find a job. Economic freedom-the ability to make our own economic decisions without interference from the government.

What are three roles of government in a mixed economy? For each role, explain whether you view this involvement as positive or negative, and why.

Protection- Needed to establish legal system to enforce laws and a stable system of currency. Regulation- Government step in to outlaw child labor; limit pollution. Public Benefits- Public works-government financed projects such as dams, highways, and sewer systems.

List the seven key characteristics of the American free enterprise system. Are there any of these that you disagree