THREE ECONOMIC QUESTIONS THAT ANY SOCIETY MUST ANSWER, REGARDLESS OF ITS POLITICAL FORM
1. What goods will be produced?
The choice of what goods will be produced in a market economy bases on consumer's desires.
Profits that are made through the goods will be an incentive for the sellers to use the limited
resources to produce more. Meanwhile, sellers also have to consider the opportunity cost to
determine whether making cetain goods is worth the trade-off. Although the scarcity of sources are
permanent, suppliers should also keep in mind of the shortage that may raise the price in the market
as the consumer's desires exceeds the amount that could be produced.
2. What methods of production are appropriate?
Suppliers' ultimate goal is to maximize their profit. Therefore, the appropriateness of methods of
prodcution will depend on the one that will cost suppliers the least, but produce the most.
3. Who will be able or permitted to consume the goods and services that are produced?
It is dependant on the goods that are produced as the suppliers target different markets. And the
targeted market will be able/ permitted to consume the goods and services that are produced.
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