The key economic decisions are: what to produce, how to produce and who is to benefit from the goods and services produced
Every economy must answer three core questions. These are: what goods and services to make, how to make them, and who receives them.
Real World
During Covid-19, the UK government answered all three questions simultaneously: produce ventilators (what), use state contracts with manufacturers like Dyson (how), and distribute free to NHS patients (who benefits).
Exam Focus
Structure longer answers around all three questions explicitly — examiners following a mark scheme will award separate marks for each, so name them.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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