Question

Explain the central problem of an economy with the help of an example.​

Answer 1

Explanation:

The basic economic activities of life are production, distribution and disposition of goods and services. A society will be facing scarcity of resources during the time of fulfillment of these activities. As such scarcity is evident, due to the availability of limited resources, and human needs having no limit.

Answer 2

Answer:

Central problems of an economy are. What to produce, How to produce, and For whom to produce.

'What to produce' relates to the problem of choice of goods and services to be produced.

'How to produce' relates to the choice of technique of production. It involves a choice between labor-intensive technique and capital - intensive technique.

'For whom to produce' relates to the distribution of goods and services across different sections of society. It focuses on the issue of Economic Equality.

As such scarcity is evident, due to the availability of limited resources, and human needs having no limits.

I hope it is helpful.....