Prepare a note on how the basic economic problems are related to the economic activities like production distribution and consumption
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Answer:
The fundamental economic problem is the issue of scarcity and how best to produce and distribute these scare resources. Scarcity means there is a finite supply of goods and raw materials
Explanation:
The four basic problems of an economy, which arise from the central problem of scarcity of resources are:
- What to produce?
- How to produce?
- For whom to produce?
- What provisions (if any) are to be made for economic growth?
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Answer:
The fundamental economic problem is the issue of limited resources and how best to produce and distribute these limited resources.
The four important questions that are to be asked for the conservation of limited resources are:
- What to produce and how much to produce?
- How to produce?
- For whom to produce?
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