Five Economic Questions

Five Economic Questions
Before a business can be up and running there are five questions that must be
answered before you can go forward:
Who will produce the goods and services?
Artists, farmers and dentists all provide different goods and services. The quality
of these products and services depends upon the skills and abilities of the
individuals involved. Workers must have a certain level of skill in order to carry
out their work at the required level.
What goods and services are produced?
Geography often determines which goods and what services are needed. Florida
farmers produce oranges and grapefruits because temperatures in Florida are
warm enough to prevent the fruit from freezing. Companies along the Ottawa
River provide whitewater rafting because the river is lined with rapids that
supports this activity.
How are goods and services produced?
Most automobiles are mass produced using assembly line techniques perfected
by Henry Ford. Cars made by Porsche and Ferraris are hand built so the quality
is much higher but so is the cost.
For whom are the goods and services produced?
Business must carefully study the wants and needs of potential customers before
they make those products or provided services. Dog walkers, for example, must
customize their services according to the needs of both pets and their owners. A
dog walker might, in addition, offer related services such as grooming or house
sitting based on the needs of customers.
How are the goods and services distributed?
Large companies such as Canadian Tire or Tim Horton’s use large trucks to
move their supplies and products to their outlet stores. However other companies
use trains or ships to move their product but this option depends on where the
goods are going and the proximity to stores and outlets.
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