Three fundamental problems are to be solved by every economy.
1. what kinds and quantities shall be produced of all possible goods and services?
2. How shall resources be used in producing these goods?
3. And for whom shall the goods be produced? Or what shall be the distribution of consumption among different individuals in the economy?
Society solve these problems in different ways - by custom, by commnad and control (central planning) and in mixed economies and free market economies by a system of prices and markets.
Prof Kenneth Train
UC Berkeley
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1. what kinds and quantities shall be produced of all possible goods and services?
2. How shall resources be used in producing these goods?
3. And for whom shall the goods be produced? Or what shall be the distribution of consumption among different individuals in the economy?
Society solve these problems in different ways - by custom, by commnad and control (central planning) and in mixed economies and free market economies by a system of prices and markets.
Video Lecture - Economics
Prof Kenneth Train
UC Berkeley
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