what is the problem of technique explain with the reference of your economy
Answers
Answer:
Central problem of choice of technique refers to the problem of how to produce. Every society has to decide on how much of which of the resources to use in the production of each of the different goods and services. Whether to use more labour or more machines. Which of the available technologies to adopt in the production of each of the goods?
Answer:
resources limited in relation to the unlimited wants, it is important to economise their use and utilise them in the most efficient manner.
It leads to the following central problems that are faced by every economy.
What to produce
How to produce
For whom to produce
What to produce: It is basically the problem of selection of commodities and their quantities to be produced. There is a limited resource, and thus producers can’t produce all the goods, in an economy.
So, every economy has this problem that what to produce and in what quantities. It has two dimensions.
(a) Kinds of goods to be produced
(b) Quantity of goods to be produced
How to produce: this problem refers to the selection of technique to be used for the production of goods and services.
There are various techniques available to produce goods.
(a) Labour Intensive Technique (greater use of labour)
(b) Capital Intensive Technique (greater use of machines)
Choice of technique mainly depends upon the availability of resources, structure of economy and policies of the government. Thus it is difficult to allocate the resource efficiently and effectively.
For whom to produce: Due to lack of resource in every economy, can’t satisfy all the wants of its people. So, there is a problem to select the category of people who consume the goods. Whether to produce goods for the rich section or poor section of society or more for rich and less for the poor section.
The allocation of scares resources and the distribution of the final goods and services are the central problem of the economy.
The Reason behind these central problems is the compulsion of making choices among alternative uses of scarce resources to get maximum satisfaction.