Three questions of Economics

Open Ended

What is the song of the day and the artist?

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In this lesson, you will investigate the three basic questions of Economics

What are we going to do?

As you read,
take notes and then use the information you've gained to analyze the scenarios provided in the final activity.

What is Economics?

1. Economics is the study of the science that deals with the production, distribution, and consumption of goods and services.

2. There are three core questions in economics. What to produce? How to produce? For whom?

Multiple Select

1. What are the Three core questions in Economics? choose all that apply

• What to Produce?

• How to produce?

• For whom to Produce

• Where to Produce?

What to Produce?

• Figuring out what to produce is key. Looking at the resources available should be considered.

• While our wants are unlimited, the resources we have available are not.

• Resources include things like physical resources, human labor, and finances.

• It is virtually impossible to have all the things we want with the limited resources available to us.

​What to Produce ?

• Market needs should be factored into product development and manufacturing.

• A company should do research to figure out what is missing or even needs improvement in the current market.

• This makes sure that there is room for the product, and sets the groundwork for profit.

Open Ended

Explain three things to consider when you are deciding what to Produce?

How to Produce?

• Once the decision of what to produce has been answered, the next step is to figure out how to produce it.

• Production factors include resources, land, labor, materials needed, and entrepreneurship.

Multiple Choice

What factors are involved in How to Produce?

• land, labor and

  entrepreneurship

• Time, Ideas, delivery

• people with money and cheap materials

How to produce

• The method of production and assembly should also be considered. One key factor to consider with production is that there is a limit to how fast an economy can grow.

• Resources can be affected during production that affects the quantity and cost of the final product.

• An alternate plan of production can be drafted to deal with a shifting economy.

​For Whom?

• For whom are the goods produced?

• This question is more important than it seems, because the answer also helps set the product price.

• Is the product aimed at higher or lower economic classes?

• Are people willing to wait for the product, or will they move to a competitor of lower quality if that happens?

For Whom?

• Are they loyal customers, or abroad range of people who may like the product but no continue to buy from the company?

• For example, a company making stuffed animals will look at their target audience when setting a price.

For Whom

While the final price will take other factors into consideration, such as the cost to make it, the toy maker won’t be selling their stuffed animals at a price that is unattractive to their target audience.

For Whom

• If the materials in the stuffed animal are not too expensive, the company can afford to have a broad audience with the hopes of making a profit by quantity of sales.

• Or, if the materials are expensive, they will have to have a higher price to profit. This would create a narrower market, as people may not pay a lot of money for a stuffed animal.

​Conclusion

• Knowing the key questions of economics is imperative to understanding world financial markets.

• We can get a better sense of our own economy by considering the what, how, and for whom of production.

Open Ended

What are the Three main questions of Economics

Explain the Process using 1000 characters