State the central problems of an economy. Explain any one of them.
Asked by Topperlearning User | 21st Apr, 2016, 12:12: PM
In every economy, there are three economic problems, they are
i. What to produce?
ii. How to produce?
iii. For whom to produce?
‘How to produce’ means how to organise production. It is the second basic economic problem of resource allocation. It is concerned with the choice of technique production. For example, production of cloth is possible either by handlooms or by modern machines. This problem is concerned with the efficient use of resources which implies more production with low cost. Thus, one needs to decide the efficient technique of production which uses the least amount of scarce resources to provide the same amount of output.
Answered by | 21st Apr, 2016, 02:12: PM
- What does the problem of ‘for whom to produce’ refer to?
- Give the meaning of macroeconomics.
- Give two examples of microeconomic studies.
- How is a market economy different from a centrally planned economy? Give any two sentences.
- Write any two differences between microeconomics and macroeconomics.
- Write two sentences each of positive and normative economics.
- What is market economy?
- What is mixed economy?
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