Economic System Questions

What Goods and Services Will Be Produced?
Most of us take for granted the incredible number of choices that go into deciding what gets produced—everything from which new kitchen appliances are introduced and to which roads get built and which movies get made (for example, movie studios pay for about 10,000 scripts a year but make only about 500 movies1). Although different economies re- solve these and millions of other questions using different decision-making rules and mech- anisms, all economies must somehow make such choices.
How Will Goods and Services Be Produced?
The economic system must determine how output gets produced.Which resources should be used, and how should they be combined to produce each product? How much labor should be used and at what skill levels? What kinds of machines should be used? What new technology should be incorporated into the latest video games? Should the factory be built in the city or closer to the interstate highway? Millions of individual decisions determine which resources are employed and how these resources are combined.
For Whom Will Goods and Services Be Produced?
Who will actually consume the goods and services produced? The economic system must determine how to allocate the fruits of production among the population. Should everyone receive equal shares? Should the weak and the sick get more? Should those willing to wait in line get more? Should goods be allocated according to height? Weight? Religion? Age? Gender? Race? Looks? Strength? Political connections? The value of resources supplied? The question “For whom will goods and services be produced?” is often referred to as the distribution question.