Question

solutions to basic problems in a socialist economy

Answer 1

The economic problem – sometimes called the basic or central economic problem – asserts that an economy's finite resources are insufficient to satisfy all human wants and needs. It assumes that human wants are unlimited, but the means to satisfy human wants are limited.

Three questions arise from this:

• What to produce?

• How to produce? &

• For whom to produce?

What to produce?

'What and how much will you produce?' This question lies with selecting the type of supply and the quantity of the supply, focusing on efficiency.

e.g. "What should I produce more; laptops or tablets?"

How to produce? Capital goods or consumer goods

'How do you produce this?' This question deals with the assets and procedures used while making the product, also focusing on efficiency.

e.g. "Should I hire more workers, or do I invest in more machinery?"

For whom to produce?

'To whom and how will you distribute the goods?' and 'For whom will you produce this for?' arises from this question. This question deals with distributing goods that have been produced, focusing on efficiency and equity.

e.g. "Do I give more dividends to stock holders, or do I increase worker wages?"

Economics revolve around these fundamental economic problem

Answer 2

Solution of basic problems in a socialist economy:

POVERTY
-By providing education, skill training and job opportunities in a society.
-Increase the education budget.
-Providing schoolarship and opportunities to get good education in big universities.
-Providing technical education in each and every school.

UNEMPLOYMENT
-Providing job oriented education.
-Training to the people by government to solve the problem of unemployment.

POPULATION GROWTH
-Awareness programme should be created about the family planning and its effect on population growth.

( I hope it will help you.)