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The central problems of an economy arises because of—
- a)Unlimited wants
- b)Scarce resources having alternative uses
- c)Limited wants and unlimited resources
- d)Both (a) and (b)
Correct answer is option 'D'. Can you explain this answer?
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The central problems of an economy arises because of—a)Unlimited...
All economic problems arises due to unlimited human wants and limited resources. Moreover, these resources have alternative uses and wants keep on increasing each day. This economic problem is also known as problem of choice or the problem of allocating resources to alternative uses.
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The central problems of an economy arises because of—a)Unlimited...
The scarcity of resources and unlimited wants of individuals and society. As a result, an economy is faced with the following central problems:
1. What to produce: The first central problem is to determine what goods and services should be produced to satisfy the needs and wants of consumers.
2. How to produce: The second central problem is to determine the most efficient and cost-effective methods of producing goods and services.
3. For whom to produce: The third central problem is to determine who gets to consume the goods and services that are produced.
These central problems arise because resources such as land, labor, and capital are limited, while the wants and needs of individuals and society are unlimited. Therefore, an economy must make choices and trade-offs in order to allocate resources efficiently and effectively.
1. What to produce: The first central problem is to determine what goods and services should be produced to satisfy the needs and wants of consumers.
2. How to produce: The second central problem is to determine the most efficient and cost-effective methods of producing goods and services.
3. For whom to produce: The third central problem is to determine who gets to consume the goods and services that are produced.
These central problems arise because resources such as land, labor, and capital are limited, while the wants and needs of individuals and society are unlimited. Therefore, an economy must make choices and trade-offs in order to allocate resources efficiently and effectively.
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The central problems of an economy arises because of—a)Unlimited...
D
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