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Intro-to-Business-Chapter-1-3-notes - Intro to Business...

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Intro to Business Chapter 1-3 Economic Systems The Three Economic Questions All economies of the world face the basic economic problem of scarcity of resources. Each country must decide how the available resources will be used to meet the needs and wants. All economies must answer three economic questions: 1. What goods and services will be produced? 2. How will the goods and services be produced? 3. What needs and wants will be satisfied with the goods and services produced? How these questions are answered indicates the type of economic system that exists in each country. What to Produce? Nations differ in the type and amount of resources. A nation will use its natural resources to determine what can be produced. It can also decide to trade some of its resources with other countries to obtain those it needs. Deciding how to use resources and what to produce is a very difficult decision. How to Produce? As a country evolves, tasks that are traditionally performed by human skills, such as farming in the United States, are now performed with faster, more efficient tools and equipment.
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