Basic problems of an economy. Definition of an economy
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ecnomy problem:The Economic problem –sometimes called basic or central economic problem – asserts that an economy's finite resources are insufficient to satisfy all human wants and needs. Economics involves the study of how to allocate resources in conditions of scarcity.
The problem ‘what to produce’ can be divided into two related questions. First, which goods are to be produced and which not; and second, in what quantities those goods, which the economy has decided to produce, are to be produced. If productive resources were unlimited we could produce as many numbers of goods as we liked and, therefore, the question “What goods to be produced and what not” would not have arisen. But because resources are in fact scarce relative to human wants, an economy must choose among different alternative collections of goods and services that it should produce. I hope it is usefull to you