explain the 3basic questions of the economy
...price, and decide the price based on the competitor’s price, too. In this process, the open economic system is able to produce the best quality and the best prices with lots of choices. In a command economic system, there is no competition, and no development, like the open economic system has. The Government owns and controls all the public’s needs and services. In this process, quality can’t be as good as in an open economic system because there isn’t any development of the products. For example, in the U.S, if we want to buy a computer, you have Sony, Dell, Gateway, Compaq, Toshiba, AMD, and E-machines. So many companies, you name it. Numbers of the customers are limited. And they all want to succeed. So they need to make cheaper, better computers than the other companies so customers will choose them. But the country that used to have command economic system like the Soviet Union, only a certain limited number of the people who needed computers were provided with them by the government factory that made only certain number of inferior products. Another example; Japanese cars started coming to the U.S in the 70’s. and American people started to buy all Japanese cars and no one bought American cars. Then American car company realized that their products quality wasn’t as good as Japanese car. They were too lazy to developed new products while they were enjoying the monopoly. From this kind of new competitor, American cars competed harder and they now produce better quality than they would if Japanese car hadn’t come to U.S market in...