Q. What to produce and how much to produce? How to produce? For
whom to produce? How to achieve economic growth?,
Aisi What to produce and how much to produce: - The first and for most
problem of every economy is what goods and services should be produced so as
to satisfy the maximum wants of the people. Then it has to decide about its
quantity, How much of consumer goods and how much of capital goods are to be
produced.
How to produce:- the problem of how to produce means which combination of
resources is to be used for the production. For example, production of cloth is
possible either by handlooms or by modern machines. When the production of
cloth is produced with handlooms, it is called 'labour-intensive technique.' When
cloth is produced with machines, it is called 'capital- intensive technique.' An
economy must decide as to which technique is to be used in a given industry so
that efficient production is obtained.
For whom to produce:- An economy has also to decide for whom to produce or
to distribute the production? In other words, 'For whom to produce' means who
should get how much of the total amount of goods and services. Thus, the third
problem is the problem of sharing the national product.
How to achieve economic growth:- Another central problem of an economy is
to increase the level of production. It is also known as the problem of growth of
resources. Growth of resources can be achieved through the technological
advancement.
what to produce and how to produce
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- What to produce: The first problem of every economy is what goods and services should be produced so as to satisfy the maximum wants of the people. Then it has to decide about its quantity, how much of consumer goods and how much of capital goods are to be produced.
- How to produce:- the problem of how to produce means which combination of resources is to be used for the production. For example, the production of cloth is possible either by handlooms or by modern machines.
- For whom to produce:- An economy has also to decide for whom to produce or to distribute the production? In other words, 'For whom to produce' means who should get how much of the total amount of goods and services. Thus, the third problem is the problem of sharing the national product.
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