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Difficulty: EasyBasic Economic Problems of Society

Match each basic economic problem of society on the left with its corresponding fundamental economic decision on the right.

  • What to produceSelecting the types and quantities of goods and services to create using scarce resources
  • How to produceChoosing the combination of factors of production and technique (labor vs. capital) to adopt
  • For whom to produceDetermining the distribution and allocation of finished goods and services among members of society

Answer

'What to produce' matches selecting the types and quantities of goods and services to create; 'How to produce' matches choosing the combination of factors of production and technique to adopt; 'For whom to produce' matches determining the distribution and allocation of finished goods and services among members of society.
Each economic problem directly aligns with its standard economic definition: 'What to produce' determines resource allocation toward specific goods, 'How to produce' determines the technical method of production, and 'For whom to produce' governs distribution among consumers.

Step-by-Step Solution

1
Identify the meaning of 'What to produce'.
It addresses the choice of output types and quantities given resource constraints.
Society cannot produce everything, so it must prioritize which commodities to produce.
2
Identify the meaning of 'How to produce'.
It addresses the production technique and resource efficiency.
Producers must choose between labor-intensive and capital-intensive methods to minimize cost and maximize output.
3
Identify the meaning of 'For whom to produce'.
It addresses the distribution of the final output.
It determines how the total national output is shared among consumers based on purchasing power or social policy.

Key Concept

Basic Economic Problems of Society
Estimated Time:45s
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Basic Economic Problems of Society

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