Economic problem

Article summary

Economic systems as a type of social system must confront and solve the three fundamental economic problems: * What kinds and quantities of goods shall be produced? "...how much and which of alternative goods and services shall be produced?" * How shall goods be produced? "...by whom and with what resources and in what technological manner...?" * For whom are the goods or services produced? Who benefits? "...how is the total of national product to be distributed among different individuals and families?" Economic systems attempt to solve these problems in several ways: "...by custom and instinct; by command and centralized control (in planned economies)" and in mixed economies using "...both market signals and government directives to allocate goods and resources." The latter is variously defined as an economic system blending elements of a market economy with elements of a planned economy, free markets with state interventionism, or private enterprise with public enterprise.…

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Discussion questions

1. Summarise the article in your own words. Which single claim would you verify first, and why?
2. Which claim in this article is most likely to be revised as the sources update? How would you check its current status?
3. If two sources disagreed about one of these facts, what would you need in order to trust one over the other?

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