Business Environment 5_ economic problem

The lecture provides economic problems: Unlimited Wants Scarce Resources – Land, Labour, Capital Resource Use Choices The 3 basic questions: What goods and services should an economy produce? – should the emphasis be on agriculture, manufacturing or services? should it be on sport and leisure or housing? how about education? healthcare? infrastructure? How should goods and services be produced? – labour intensive, land intensive, capital intensive? efficiency? Who should get the goods and services produced? – even distribution? more for the rich? more for the poor? more for those who work hard?

The Economic Problem

The Economic Problem

• Unlimited Wants

• Scarce Resources – Land, Labour, Capital

• Resource Use

• Choices

A wind farm.

Due to scarcity, all societies or economies must answer

The 3 Basic Questions

• What goods and services should an economy

produce? – should the emphasis be on agriculture,

manufacturing or services? should it be on sport and

leisure or housing? how about education? healthcare? infrastructure?

• How should goods and services be produced? – labour intensive, land intensive, capital intensive?

efficiency?

• Who should get the goods and services

produced? – even distribution? more for the rich? more for the poor? more for those who work hard?

Due to scarcity, all societies or economies must answer

The 3 Basic Questions; continued

• That is, an economic system must decide the allocation of

inputs(resources) among producers, the mix of output, and

the distribution of output, no matter the scale of the

economy and level of development

• All societies are endowed by nature and by previous

generations with scarce resources Every society must

decide how to use these inputs to satisfy human wants

• Specifically, resources must be divided up among

producers who transform them into goods and services

that in turn must be allocated among households or

members of society

faced by Vietnam government.

can you solve this specific

problem? What are the strategies you would take?