Unformatted text preview: coordinate production,
distribution, and consumption and represent our fifth
key characteristic of market systems. 22 Learning Objective 2-2 Slide
23 Five Fundamental Questions An
Economic System Must Answer
1. What goods and services will be
2. How will the goods and services be
3. Who will get the goods and services?
4. How will the system accommodate
5. How will the system promote progress
(enable technological progress and capital
Chapter 2 23 Learning Objective 2-3 Slide
24 What will be produced?
The market process and price automatically address
what we will produce in that producers are able to
recognize how much demand exists for different
goods and so long as profit potential exists to meet
this demand (price is high enough), producers will
Consumers make this determination by voting with
dollars and behaving with consumer sovereignty
(being in command).
Chapter 2 Learning Objective 2-3 24 Each economic system must address the following five
1. What goods and services will be produce...
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This note was uploaded on 09/10/2009 for the course ECO 2251 taught by Professor Kirkland during the Spring '09 term at Troy.
- Spring '09