Tag: major economic problems

The central problem of how to produce is resolved by the relative prices and availability of factors of production. This problem refers to the selection of technique to be used for production of goods and services. Thus when we know the prices and availability of factors of production, we can identify the techniques that should be used to produce a particular combination of goods and services. 

The economic problems of what, how and for whom to produce arises because the resources in the economy are scarce. The resources present in the economy are limited but the demand for them is unlimited. Due to this, wants of people remain unsatisfied. As a result, goods are not available and the economic problems related to the allocation of distribution of resources arises. 

What to produce is an alternative problem of allocation of resources. It talks about the things that should be produced with the limited resources that are available in the economy. Thus it is important that you allocate these resources to various uses in an efficient manner. So that the maximum output can be achieved.

The three fundamental questions of economics are:

1.      How to produce: it talks about the techniques that should be used to produce goods and services that are required by the people.

2.      What to produce: it talks about the things that should be produced with the limited resources that are available in the economy.

3.      For whom to produce: it talks about the selection of the category of people for whom the goods are to be produced. More for the rich, less for the poor or less for the rich and more for the poor. 

Hence, we see that when to produce is not a central problem.

The three fundamental questions of economics are:

1.      How to produce: it talks about the techniques that should be used to produce goods and services that are required by the people.

2.      What to produce: it talks about the things that should be produced with the limited resources that are available in the economy.

3.      For whom to produce: it talks about the selection of the category of people for whom the goods are to be produced. More for the rich, less for the poor or less for the rich and more for the poor. 

So where to produce is not a central problem.

The central problem of a society refers to all such prominent problems that affect the civilians of that society directly. Therefore, the problem of 'how to eat' is the problem of deciding the accurate consumption by an individual through various commodities available to him. 

Corruption is an arrangement of dishonesty or against the law crime is undertaken by a person or organization entrusted with a situation of influence. Corruption is steady in society and occurs in all civilization. The majority general cause of corruption is the political and economic environment, personal ethics and morality and of courses, habits, customs, tradition, and demography. 

Its effects on the economy are well-research, yet still not completely.  Corruption thus inhibits financial growth and affects business operation, employment and investments. It also reduces tax revenue and the effectiveness of various financial support programs.

The correct option is D.

It is a very well known fact that human wants are unlimited as if on need is satisfied then there are generations of many other needs which are to be satisfied. Therefore, every economy is characterized by humans which refers to unlimited wants and needs. 

Corruption erodes the expectation we have in the public sector to act in our best interests. It also wastes our taxes or rates that have been earmark for the important centre of population projects – meaning we have to put up with poor quality services or infrastructure or we miss out altogether. 

Fiscal loss, damage to employee morale, damage to an organisation's reputation, organisational focus and resources abstracted away from delivering core business and services to the community increased scrutiny, oversight and regulation.

The correct option is B.

The problem of what goods and services are produced and how much, is covered by the general term Resource Allocation. Allocation of resources refers to the problem of assigning the scarce resources in such a manner so that the maximum wants of the society are fulfilled. As the resources are limited in relation to the unlimited wants, it is important to economize their use and utilize them in the most efficient manner.