Question: Define what is meant by an economic system. Explain how Australia's economic system attempts to solve the economic problem.

Each society is faced with a job concerning their sparing state. The frugal problem is that there are limited resources in recounting to unlimited indispensabilitys. This problem brings about the need for a remains to answer questions like what to produce, how to produce, how much to produce and how to conduct proceeds. An frugal clay is the organisational and institutional pattern through which choices are do about which wants to satisfy, and how to allocate resources to do this. The different stinting organizations implicate planned economies, market economies and mixed economies. Australia has a mixed-market scotchal system in which there is a mixture of go over by the government and freedom of individual enterprise and in which the staple economic questions are answered in the market place. An economic system must answer the questions what to produce?, how much to produce, how to produce and for whom to produce. The economic problem creates a situation where econ omies must decide which neat or service to produce at the cost of another(prenominal) good or service not being produced, as a result of the limited resources available. For example, toffee apples are produced at the fortune cost of fantails. The close of the quantities the good leave behind be produced in must also be determined.

The question of how to produce refers to the combining of resources employ to produce a good or service. For example, a particular(prenominal) confectionary item can be produced by human amicable movement (labour) or machines (capital), hence, the decision of which is the more efficient kernel of producti on must be made. Who locomotes the goods an! d services that are produced is the concluding decision that is made in production; it determines to whom the goods and services will be distributed to. There are two theoretical extremes of how these questions... If you want to get a full essay, order it on our website: BestEssayCheap.com

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