what are the three center problems of an economy? why do they arise?
Answers
Answer:
The central problems of an economy is the production of goods and services, its distribution and indisposition/sales. these problems arise mainly due to unavailability/scarcity of resources which affects all the above systems.
Explanation:
The central problems of production deals with production of necessary commodities using scarce means of resources. It includes problems that deal with the production of goods in an economy where it is decide that
What to produce? Consumer goods or capital goods?
How to produce? Using labour or capital?
For whom to produce? Rich people or poor people?
The central problems of the economy arises because the resources in the economy are scarce and human wants are unlimited. Therefore, there is need for an efficient relationship between both the factors.