Explain briefly as to how the economic problem is essentially
Answers
Answer:
Economic problem is nothing but choosing your limited resources in such a way that maximum wants can be satisfied.
When the same resource can be used to satisfy two or more needs and wants it is called alternative use of resources, and that is why the economic problem arises;which is also called the problem of choice.
Explanation:
To begin with,
Economics = resources(limited) +needs of human(unlimited)
Economic problem = choosing limited resources in such a way that maximum wants can be satisfied.
These wants can be of an :
1. Individual - who is concerned about spending his income (resource) in such a way so that he can satify his need and wants( food, shelter) effectively and efficiently.
2. Producer= he is concerned about investing his profit(resource) to satisfy need and wants which, maye be, retaining the profit to himself or investing it into business.
3. Nation- government of an economy (country) faces economic problem as its resources are also limited such as tax, revenue, and has to spend its resource in infrastructure, schemes etc.