Central Problem of an Economy Video Lecture - CA Foundation

hello everyone here we start with the
topic central problems of economy what
do you mean by central problem economic
problem or central problem is basically
the problem of making choices in the
presence of scarce resources for
satisfaction of unlimited human wants
her country Co a problem phase Kearney
Parthia no country can avoid that you
can see on the screen we have three
central problems of an economy what to
produce in what quantities how to
produce and for whom to produce now we
move on to the first big question that
is what to produce and in what quantity
the main problem here is to choose the
type of good to be produced and then the
quantity every nation has different
choices available like we can choose
between the luxury goods or necessary
goods the economy can also make a choice
between peacetime woods or wartime goods
the economy can also choose between
consumer goods an producer words the
economy has to decide which goods it has
to produce but how will it decide
economic okay SEPA the consequence
banana is kaliba Strega for that thing
the guiding principle comes into an
action guiding principle guides the
economy about how to take the decision
so the guiding principle here is an
economy will choose to produce goods
that provide maximum aggregate utility
for example a Gurkha country bought
puree they should focus on making
necessary goods
instead of luxury goods so this is how
they choose Joe good some a substance
other satisfaction being a humble
bernanke I hope you get it clearly now
we move on to the second big question
that is how to produce the main problem
here is that the economy has to make a
choice about what kind of technique of
production is to be used by them there
are two types of techniques one
labor-intensive other comprehensive as
you can see labor intensive means more
labour less capital capita densive means
less labour more capital
for example is a farmer and in the
picture you can see if he is working
manually that means is using
labor-intensive technique and if he uses
machines like tractors combiners
harvesters etc that means he is using
captain densive technique how will he
choose which technique is best again the
guiding principle comes into the action
for guiding to make a right decision
so guiding principle here is the best
technique of production is the one which
uses minimum resources or cost Jo
technique sub succumb cost use karegi
voix merrily best M so this is how we
decide which technique is best for us
how can you present the problem see
every problem can come for three or four
marks separately they do not come
entirely for six marks like that so if
it comes to three or four marks then you
have to follow the following
presentation points as you can see on
screen you have to write down the main
problem you have to explain the problem
through an example like we did with the
example of Farmer and third write the
guiding principle if the problem comes
for three marks then the distribution of
marks will be 1 1 1 if it comes to four
marks then dissolution marks will be one
to one main problem for one mark
expansion for two marks guiding with
reform one mA and you should not change
the order of the presentation points as
these chronological things are going to
help you get maximum marks now we move
on to the third big question that is for
whom to produce now this is the problem
of distribution of goods and services
produced in an economy the way of
writing this problem is total different
from the previous two so now the first
point says production is the result of
combined efforts of factors of
production land labor capital and
entrepreneurship second point says thus
the income generated has to be
distributed among different factors of
production on the basis of the function
this is known as theory of functional
distribution which is important and
carries one mark separately for in the
explanation theory of functional
distribution karmically Baek agar aapke
paas
boy beam comes in red hoodie a so on the
basis of functions are Pune alag alag
factors of production
distributing just factor car Joe
functioned I chose base pay income
divide key like such distribution of
income generated is done among different
sections of society which depends upon
the wealth distribution economy for
example India has an even distribution
of income and wealth
Coosh la quadrature coastal baccarat so
this is uneven distribution s economy
kea it becomes really tough to decide
for which section we should produce the
income plus producing goods also for
which section is again a major decision
in such economies so again the guiding
principle comes into an action economy
should produce in such a way that every
section of society should get minimum
subsistence her kisi ki minimum needs
fulfill oh that should be the aim while
producing and while taking decisions for
him to produce this is how we explain
three problems I hope you really liked
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ekkada calm thank you