Question

Explain the central problem of ‘For whom to produce’ in an economy.

Answer 1

Managerial economics deals with the application of the economic concepts,theories,tools and methodologies to solve practical problems in a business.it helps the manager in decision making and acts as a link between practice and theory".[1] It is sometimes referred to as business economics and is a branch of economics that applies microeconomic analysis to decision methods of businesses or other management units.

As such, it bridges economic theory and economics in practice.[2] It draws heavily from quantitative techniques such as regression analysis, correlation and calculus.[3] If there is a unifying theme that runs through most of managerial economics, it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by scarcity, for example through the use of operations research, mathematical programming, game theory for strategic decisions,[4] and other computational methods.[5]

Answer 2

Answer:

• For whom to produce:

>> According to this problem the goods produced by the economy is must reach to the consumer. Therefore, market in every region must be developed. Goods manufactured in the economy must be for all consumer class i.e poor class, middle class and rich class. Goods for poor class must be supplied through ration shops in the economy at very cheap rates but it is only for poor class not for middle and rich class.

Extra Information:

>> What is production?

• Production means art if creating wealth among goods.
• Production means art of creating utility among goods. For example: Converting raw material into finish goods.