Question

Mr Lalit has 5 acres of land. He has two major business alternatives-one manufacturing
apparels, jeans etc, second a famous group of hotel chains. Through establishment of factory Mr
Lalit can earn Rs. 10, 00 000 monthly and through hotels, he can earn Rs. 15, 00 000 monthly.

Answer 1

Answer:

Mr. Lalit has 5 acres of land. He has two major business alternatives-one, manufacturing apparels, jeans etc, second a famous group of hotel chains.

Through establishment of factory Mr Lalit can earn Rs. 10, 00 000 monthly and through hotels ,he can earn Rs. 15, 00 000 monthly.

(a) Why Mr Lalit is facing the problem of choice?

(b) What is the alternative he should choose and why?

(c) Explain the concept of opportunity cost through this example.

(d) State the three central problems of economy.