Question

30. A production possibility curve indicates the
(a) Allocation of supply of a commodities among a
member community.
(b) Efficency with which a community's resources
are used to satisfy its wants.
(c) Attainable combinations of commodities for a
community using all its available resources.
(d) Quantities in which a community decides to
produce various commodities.
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36​

Answer 1

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Answer 2

Answer:

Economics

September 29, 2019 by Bhagya

NCERT Solutions for Class 12 Micro Economics Chapter-1 Introduction to Economics

NCERT TEXTBOOK QUESTIONS SOLVED

Question 1. Discuss the central problems of an economy. [4-6 Marks]

Answer: The three central problems of an economy are:

What to produce? [CBSE 2004C, 05, 06, 08, 08C, 09, 10; AI 2006, 10]

(a) What to produce refers to a problem in which decision regarding which goods and services should be produced is to be taken.

(b) Since its resources are limited, every economy has to decide what commodities are to be produced and in what quantities.

(c) ‘The guiding principle for an economy here is to allocate resources in such a way that gives maximum aggregate utility to the society.

How to produce?[CBSE 2014C, 2006, 08C, 10, AI 2001, 05, 08, 10, 11]

(a) How to produce refers to a problem in which decision regarding which technique of production should be used is made.

(b) Goods and services can be produced in two ways: by using labour intensive techniques, and by using capital-intensive techniques.

(c) The guiding principle for an economy in such a case has to decide about the techniques of production on the basis of cost of production. Those techniques of production should be used which lead to the least possible cost per unit of commodity or service.

For whom to produce?[CBSE 2014, 2005C, AI 2013]

(a) For whom to produce refers to a problem in which decision regarding which category of people are going to consume a good, i.e., economically poor or rich.

(b) As we know, goods and services are produced for those who can purchase them or have the capacity to buy them.

(c) Capacity to buy depends upon how income is distributed among the factors of production. The higher the income, the higher will be the capacity to buy and vice versa. So, this is a problem of distribution.

(d) The guiding principle is that the economy must see here that important and urgent wants of its citizens are being satisfied for the maximum possible extent or not.

Explanation:

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