Three Economic Questions

What are the three basic economic questions all societies must answer?

• Who gets to produce goods and services, who gets to consume them, and who collects the profits?

• Why should goods and services be produced, when should they be produced, and how should they be produced?

• Where should goods and services be produced, who should sell them, and who should get the profits?

• What goods and services should be produced, how should they be produced and who will consume them

The distribution of income received in the form of rent, wages, or interest is the main factor that determines

• How goods and services are produced.

• Where goods and services are consumed

• Who produces goods and services

• Who consumes goods and services

An economy that maximizes its scarce resources and can deliver the right goods in the right quantity to the right people at the right price has achieved which economic goal?

• Freedom

• Security

• Equity

• Effciency

How does innovation promote economic growth?

• By reinforcing traditional values in a society

• By ensuring people's freedom to make their own choices

• By rewarding the development of efficient technology

• By introducing new goods and services that create new markets

Which basic economic goal is most easily achieved in a traditional economy?

• Innovation

• Growth

• Efficiency

• Equity