Introduction
Faced with limited resources within their borders, and populations with unlimited wants, nations must figure out a way to organize their resources to provide as many goods and services as they can. All nations must answer three questions in establishing their economic systems:
- What goods and services will be produce?
- How will we produce those goods and services?
- Who gets the goods and services that are produced?
How a nation answers these three questions depends on which broad social goals it wants to achieve. The goals a nation deems important will help it decide how to answer the three questions of what, how, and who. We will revisit the idea of opportunity cost as nations cannot achieve all social goals at once. Just like individuals and businesses, countries face tradeoffs when making economic decisions.
Following successful completion of this lesson, students will be able to:
- describe command, market, traditional and mixed economic systems.
- identify the economic questions facing all nations.
- analyze the advantages and disadvantages of each of the three economic systems.
- describe and analyze the different economic goals of societies.
The above standards correspond with the Alabama Course of Study: Economics objective(s): 3, 3.1, 3.2, and 3.3.