Why the economic problem arises?
economic problem: We have unlimited wants, but resources are relatively scare. In the US- a capalist market the three economic decisions: 1:what to produce 2:how to produce 3:for whom to produce are answered by the consumers and firms. The Government has minimal influence over the market and only intervenes when it needs to. Consumers make the decision about what to produce. The interaction in the market between consumers and firms- firms only produce what is demanded. Firms attempt to make as much profit as possible- therefore the cheapest method of production is used to produce the goods/services. Those with the most productive resources have the most access to what is produced. The government gives out pensions and what not to ensure that those that have no money can still make a living.
