6. what are the five fundamental questions that an economy must answer?\na.\nb.\nc.\nd.\ne.\n7. list and…

Brief Explanations:

6. The five fundamental questions an economy must answer are: What goods and services will be produced? How will the goods and services be produced? Who will get the goods and services? How will the system accommodate change? How will the system promote progress?
7. The three most important virtues of the market system are: Efficiency - it allocates resources to their most productive uses; Incentives - it encourages innovation and hard - work through the profit motive; Flexibility - it can adapt to changes in consumer preferences and technological advancements.
8. The two problems that lead to the demise of command systems are: Lack of incentives for workers and managers as there is no profit motive; Poor information flow as central planners may not have all the necessary information about consumer wants and production possibilities.
9. The circular flow model shows the flow of goods, services, and resources between households and firms, as well as the flow of money in the form of income and expenditures.
10. The market system deals with risk through diversification (investors can spread risk across different assets), insurance (transfer of risk to insurance companies), and price signals (prices adjust to reflect risk levels in different sectors).

Answer:

6. What goods and services will be produced? How will the goods and services be produced? Who will get the goods and services? How will the system accommodate change? How will the system promote progress?
7. Efficiency - Allocates resources productively. Incentives - Encourages innovation via profit motive. Flexibility - Adapts to changes.
8. Lack of incentives - No profit motive for workers/managers. Poor information flow - Planners lack full info.
9. Flow of goods, services, resources between households and firms, and money flow.
10. Through diversification, insurance, and price signals.