The Three Basic Economic Questions BY: Ashley pimentel

"Because we live in a world of relatively scarce resources, we have to make wise economic choices."

There are three basic questions we must answer first, in doing so we can make important decisions about the ways our limited resources are used.

WHAT to produce?

When trying to figure out what exactly to produce these questions come to mind, Should a society direct most of its resources to the production military equipment, food and clothing? If we choose to direct it towards housing, should we build low-income or high-income houses? There are so many more questions within the three economic questions. A society can never have everything that everyone WANTS so it must decide what it NEEDS to produce.

HOW to produce?

When we think of how to produce something questions about quality and structure come to mind. For example, should factories use methods of mass production? Should they hire a lot of workers of just a few? Should they use a lot of equipment or should they use less? Well, mass production can lower production costs and lower costs make manufactured items less expensive which means it's available to a lot more people.

FOR WHOM to produce?

After a society decides WHAT and HOW to produce, the things/items produces must go to someone. For example, if a society decides to produce housing should the houses go to the workers? or maybe the homeless? If there are not enough houses then a society must decide who the gets the rest of the houses. This is not an easy question to answer since there are an unlimited wants of people and only a limited supply of resources.

Who should get the item that was produced?

WHAT, HOW, and FOR WHOM to produce? These questions are not easy for a society to answer. Nevertheless, they must be answered as long as there are an unlimited amount of wants and a limited amount of resources.


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