Activity 3 page 2

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In Workbook 14, Activity 2, you explored the idea that societies must answer the three basic economic questions:

• What goods should be produced?
• How should these goods be produced?
• For whom should the goods be produced?

In market economies, these questions are answered by individuals and privately-owned companies. In mixed economies, these questions are answered by individuals, privately-owned companies, and the government (public sector).

How might you rewrite these questions from the perspective of the consumer in these markets? Finish the sentences below with the appropriate words.

You may click the Check Your Answers button below to check your responses.

1. What goods should I ___________?
   
   
2. How should these goods be ___________?
   
   
3. _________ whom should I buy the goods?

Being a consumer and answering the three economic questions can be challenging, especially for teenagers.

In market and mixed economies, consumers make choices about what goods and services to purchase. The choices made by consumers affect the production and distribution of goods and services in an economy.

For example, if consumers are no longer interested in purchasing a particular good (this means demand is absent), then the production and distribution of this product will slow down and eventually stop. The producers of the good will have to make changes to the product or start producing something that is in demand or the producer will go out of business. You can see that consumer demand has a significant influence on what is produced in market and mixed economies!

Many products and influences affect your purchasing decisions. These influences include product advertising, government decisions, scarcity of the product or service, impact on the environment, impact on humanity, your individual or collective identities, and, of course, having access to money.

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