Identifying the basic economic concepts and problems, fundamental principles of capitalism, and economic-political systems
The economic wants that individuals and organizations can afford form the basis for creating the demand for goods and services that businesses attempt to provide. To create useful goods and services, businesses use natural resources, land, labor, capital goods, and management. Because no nation has enough resources to satisfy everyone’s wants, an economic system helps decide answers to basic questions such as what goods and services will be made, how they will be made available, and who will get them.
The two types of basic economic systems are market and command economies. The main market economy is capitalism, which is found in various countries including the United States. The primary command economy is communism. In communism, deciding who gets what goods and how they get them is done by a central government agency that makes the decisions. Socialism is a combination of market and command economies, where some of the economic decisions are made by customers and others by government.