What are the 3 economic questions that must be answered?

economic profit

The three basic economic questions should be answered by a society that can define itself as successful when it comes to how they take care of their people financially. The answers to these key economic questions will prove that society is doing its duty in ensuring that the basic needs of its people are met and that it is indeed making money. This article will answer the question of economic profit later.

What, How, and Whom are the three economics questions that every society is supposed to answer right. 

The first economic question requires society to choose what to produce. The items that their people will need may not be the ones they choose. The company’s decision to make items might be based on the resources in their area. Cars, oil, food, and other items might be produced by a society.

A society can be anything from a country to an organization. After choosing what item to make, society will decide how it will be made. So questions like, “Is it possible that the raw materials could be imported?”, “Is it a good idea for foreign experts to process the raw materials?” or “Is it possible to process the items using local labor?” The answers to these questions should be part of society’s economic plan.

what is economic profit

To answer the third important economic question, society needs to choose who the produced goods will be for. A community will decide if the product should be for the rich or poor.

To be successful, a society has to be able to answer questions while also taking care of the needs of most of its people. What are the 3 basic economic questions that need to be answered by all of us? Let’s take a look at the origins of these three questions.

When there was a need for every society to take charge of overseeing the needs of its members, the three economic questions came to be. There were many problems with resources and scarcity before these three basic needs were established. The basic economic questions were invented when people realized that a more coordinated system of ensuring everyone survived was necessary.

  • Resources: The problem of not having enough resources to satisfy a man is still an issue that every society has to tackle. A community can’t have all the raw materials they need. The skills and expertise of other societies, organizations, states, or countries are still needed by those who think they have all they need.
  • Scarcity: Humans will always have insatiable needs and wants. Human beings always want more, even with the availability of all the resources. The three economic questions were created to satisfy a man because of the resources and scarcity problems.

The ancient man had little to no orderliness and organization when it came to resources and scarcity. Back in 322BC, philosophers tried to address these problems. Their interest gave way to three economic questions and a strategy that will help every society answer the basic financial questions.

Every society has a way in which it answers the three economic questions by how they run their political and economic system. To know what a community is producing, how they are creating it, and who they are making it for, you need to closely look at how their political and economic system is structured. I think it’s interesting, right? You need to know how it works before you can make a decision.

Economic systems

The traditional economic system, command economic system, and market economic system are the three types of economies that exist. We need to take a closer look at each of these economies.

A traditional economic system is one where the resources available in society are controlled by the customs or traditions of the community. These customs have been passed on from generation to generation even though they are years old. Following what the elders of the society decree, the resources in these societies are handled hereditary. What nature gives society affects the three economic questions here. No money is usually involved in societies that practice this financial system. In Asia, Africa, and parts of South America, this economic system is used. A command economic system uses a central government to control resources. Three questions of economics are answered by this same central authority. Who gets the created items, how they will be made, and what will be produced are some of their decisions. The socialist system is their political system. The Soviet Union had a prominent economic system that didn’t know the needs of each individual. Benefits are shared equally and no tips or extras are given for extra work.

Producers decide what they want to produce and how it will be created in a free-enterprise system. Who can afford what is being built in the third economic question and determines WHOM? In this area, the consumers pick what they want and manufacturers produce it. This kind of economic system is practiced by the United States of America.

There are advantages and disadvantages to the traditional, command, and market economic systems. They all answer the same three financial questions for every society they practice.

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