Three+Fundamental+Questions+of+Economics


 * Three Fundamental Questions of Economics**

**__What to produce__** Producers either produce goods and/or provide services. Goods are tangible (has physical substance). There are two types of goods: // Consumer goods // are used for personal use. // Capital goods // are goods that are made to produce other goods or services.  Services are intangible (no physical substance) and are available to satisfy the needs and wants of consumers. The majority of countries are classified between a command a free market. Any production is determined by choice.   **__How to produce__** Opportunity cost is the value of the next best alternative that is given u as a result of making a particular choice. How to produce a good depends on opportunity costs of labour and capital, and the productivity of land and labour. **Land** - Natural resources such as; oil, gas, trees, fish, water or the ground below us, any of these resources can be either renewable or non-renewable. **Labour** – Mental and Physical efforts of employees. **Capital** – // Real capital; Capital goods such as machines //, // Human capital; any training or education used to contribute to production. // // Intellectual Capital; any copyrights or trademarks used in the process of production. // **Enterprise** – The ability to combine land, labour, and capital to produce new goods. To be risky and innovative.  There are many factors to consider when producing goods and services. As a business owner, you need to decide whether to produce everything yourself or going to an outside source. You also need to determine if sales should stay in your country or if you would have products and services available in other countries.  **__For Whom__** This question focuses on how we organize our society to meet people’s wants and needs. We do this by categorizing into 4 groups: **Cooperative** - decides together as a group, **Custom** – Tradition decides, **Command** – People in power decides, **Competitive** – Economy decides by supply and demand. <span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">“All goods and services are produced for somebody to consume.” In Canada, who gets what is determined by supply and demand. <span style="line-height: 12pt; margin: 0in 0in 0pt; mso-line-height-rule: exactly; tab-stops: .5in 45.0pt;"> <span style="line-height: 12pt; margin: 0in 0in 0pt; mso-line-height-rule: exactly; tab-stops: .5in 45.0pt;"> []