How Economic Systems Answer the Three Basic Questions # 3

1. What are the three basic economic questions that every society (economic system) must answer? How to produce, what to produce and whom to produce for.
2. What is an economic system? What are the four types of economic systems and how does each answer the three basic economic questions? Give one example of each. An economic system is a method used by society to produce and distribute goods and services. The four types of economic systems are Command where the government controls how the three economic questions are answered, Market where decisions are made based on voluntary exchange in markets, Traditional where the three basic economic questions are answered through tradition, and Mixed where the market and the government control how the three basic economic questions are answered.
3. While the United States is largely a market economy, how does it also reflect a combination of economic systems. Our society is run based upon the principles of the constitution which makes it traditional. The government is largely involved in the economy which makes it command. The stock market provides us with the market economy aspect.
4. The Inuit tribe in Alaska teach their children that they must always do their best at every task. The child begins by observing the adults working on a task. When the time comes for the child to do the task, the task is first divided into smaller tasks. The adults praise the child at each stage the child successfully completes. When all stages have been complete, the child if ready takes full responsibility for the task. What economic system is used by the Inuit? Explain. The Inuit tribe uses a traditional economic system because they teach their children meaning that they would have had to have been using that system for some time in order for the adults to be able to teach the children.
5. How do market, command and traditional economics systems compare and contrast with each other in terms of profit motive, private ownership, consumer sovereignty, competition and government regulation? Market and Command economies focus on profit while Traditional economies focus on providing for their people. In a Market economy their is a lot of private ownership while in a Command economy the government owns everything and in a Traditional economy everyone owns the businesses. In a Market economy consumer sovereignty regulates supply and demand. Competition is a another factor that helps regulate a Market economy.
6.Explain why Adam Smith would oppose government intervention in a market economy. Give a specific example of why you support Adam Smith’s theories of laissez faire and the ‘invisible hand’ in a market economy and one example of why you would oppose his theory? Explain. I support his theory because there is in fact an invisible hand that regulates  market economy. This means that producers will supply what consumer need most. I oppose this theory because there may be a need consumers have that producers can't supply.

Production Posibilities Curve; Rational Decision Making; and Specialization # 2

1. If you owned a business, what would a productions possibilities curve tell you? Be specific. What are two factors that could your productions possibilities curve to shift outward? A PPC could tell me what products could be produced efficiently. Developing new technology could cause the Productions Possibilities Curve to shift, Investing in Human Capital could as cause the curve to shift outwards.
2. What is the best way to determine whether or not we are making a rational economic decision? `The best way to determine whether or we are making a rational economic decision is by determining if the Marginal Benefit exceeds the Marginal Cost. 
3. Why do companies choose to specialize and trade? What would happen if companies did not choose to specialize? When a company chooses to specialize they can increase production because companies choose to specialize based on opportunity cost. Companies trade based on what they specialize in. If companies did not specialize they would not be able to produce a maximum efficiency.
4. Include two relevant visuals (based on standards) with captions that explain their significance to the standard.

Chess involves a lot of Rational Decision making and making the wrong ones could lead to defeat.

This Picture defines specialization.

 5. How do you fell about your knowledge of this standard? What are two questions that you have about this standard? I feel very good about my knowledge of this standard. Two questions that I have are, What are some methods to making rational decisions, and how are people trained to specialize?

Limited Resources and Unlimited Wants and Needs

•  1. How does scarcity influence choices you make about how you spend your money? Give a specific example of a trade-off you had to make. What was the opportunity cost of your decision? Afterwards, how did you feel about your choice? Scarcity influences choices that you make because of the fact that there are limited resources that cannot supply unlimited wants and needs. A trade-off I had to make was when I decided to buy a soda instead of buying a hamburger, the opportunity cost was that I was still hungry afterwards. Afterwards I felt as though i should have bought the hamburger because 10 minutes later I was thirsty again.
• 2. There are four factors of production- land, labor, capital, and entrepreneurship. How business owners influence each of these factors of production? What is a risk and a reward that business owners might incur with each of these four factors of production? They influence land by choosing where to build their business, they influence labor by hiring workers, they influence capital by charging money for their services, and they influence entrepreneurship by being entrepreneurs. A risk with land is that they may be in place that doesn't need whatever service thay provide and a reward is that they might in a very wealthy neighborhood. A risk with labor is that you may have lazy workers and a reward is that they may also be very productive. A risk with capital is that it could be stolen and a reward is having that capital to spend.
• 3. Do you see yourself more as an individual that will supply labor or as an entrepreneur who makes decisions about the use of labor? Explain how you reached this conclusion. I see myself as more of a entrepreneur because of the many leadership skills I possess and the amount of intelligence I possess.
• 4. Include two relevant visuals (Based on standards) with captions that explain their significance to the standard(s).
• 5. How do you feel about your knowledge of this standard? What are two questions you have about this standard? I feel very confident about my knowledge of this standard. Two questions I have are, how can I benefit from knowing these things and how will they affect me?

The picture above shows limited resources and this picture shows scarcity.