Microeconomics Questions pg 70.docx

Microeconomics Questions pg 70.docx - Microeconomics...

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Microeconomics Questions Pg. 70 Q. 2,3,4 Bayleigh Ventura 1. What are the three basic economic questions that all economies must answer? Describe the differences in the ways capitalism and socialism answers these questions. -What shall we produce? Capitalism looks at this question as what they can sell in order to make a profit. Socialism would answer this question by seeing how they could redistribute money to the lower middle class. -How shall these goods and services be produced? Capitalism would look at it as how they can produce the product and still be able to make a profit. Socialism would just look at what tools are needed to produce the product. -For whom shall the goods and services be produced? Capitalism would look at this to see who they can produce a product for and be successful. Capitalism would look at how they would help the lower and middle class. 2. What was Adam Smith’s invisible hand, and what economic function did it serve? Adam Smith’s invisible hand was referred to one’s self-interest, which guides
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