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3 economic issues (What to produce? (involves (Selection of goods and…
3 economic issues
What to produce?
involves
- Selection of goods and services to be produced.
- The quantity to be produced of each selected commodity
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Two aspects:
1) What possible commodities to produce (which consumer goods (rice, wheat, clothes, etc.) and which of the capital goods (machinery, equipment’s, etc.))
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How to produce?
Techniques:
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Selection of technique => objective of raising the standard of living of people and to provide employment to everyone
Goal - maximum output produced at minimum cost, using least possible scarce resources.
For Whom to produce?
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Objective:
Ensure that urgent wants of each productive factor are fulfilled to the maximum possible extent