Following are the three important basic questions associated with every economic activity.
1.
What to produce and how much to produce?
2.
How to produce?
3.
For whom to produce?
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answer. Although every society answer the 3 basic economic question differently in doing so,each confronts the same fundamental problems,resources, allocation and scarcity.
Resources are all of the ingredients needed for production,including physical material,labor,technology .scarcity refers to essential fact that peoples wants or desires are always going to be greater that the resources available to fullfill those wants.
simply put, scarcity means that resources are limited.no country can produce everything,no matter how rich its mines, how massive it's technology.Because of the constraints of scarcity,then decision must be made about resources allocation.
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