Lecture 4 - Lecture 4 Supply and Demand Part 1 the three...

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Lecture 4: Supply and Demand, Part 1 the three basic economic questions markets and prices demand supply The Three Basic Economic Questions All societies must deal with scarcity and, therefore, must have some way of answering 3 basic economic questions: 1. What goods and services are produced and in what quantities? 2. How are they produced? 3. Who gets the goods and services that are produced? There are two extreme systems for answering these questions. In a communist economy, the government decides all the answers. In a capitalist economy, the questions get answered through the interaction of buyers and sellers in the market. communist economy: government ownership of resources government allocation of resources and the goods and services produced capitalist economy: private ownership of resources use of markets to allocate resources and the goods and services produced Most actual economies contain a mix of private and government decisionmaking. Markets and Prices
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This note was uploaded on 03/21/2012 for the course ECO ECO2023 taught by Professor Hermbaine during the Winter '09 term at Broward College.

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Lecture 4 - Lecture 4 Supply and Demand Part 1 the three...

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