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Difficulty: EasyBasic Economic Problems of Society

When a furniture manufacturing enterprise decides whether to assemble tables using skilled hand carpenters or fully automated woodworking machinery, which basic economic problem of society is it addressing?

  1. How to produceAnswer
  2. B
    What to produce
  3. C
    For whom to produce
  4. D
    Where to produce

Answer

The economic problem addressed by choosing between manual labor and automated machinery is 'How to produce'.
The decision to use manual labor versus automated machinery is a choice between production methods (labor-intensive vs. capital-intensive technology). In economics, deciding the combination of resources and technology to manufacture goods answers the central question of 'how to produce'.

Step-by-Step Solution

1
Analyze the decision described in the scenario
The firm is choosing between using human labor (hand carpenters) or capital equipment (automated machinery).
Identifying the nature of the choice helps categorize it under fundamental economic questions.
2
Map the technical choice to the corresponding basic economic problem
Selecting the combination of inputs and production techniques (labor-intensive vs. capital-intensive) answers the question of 'how to produce'.
'How to produce' specifically governs the methods, techniques, and factor inputs utilized in output generation.

Key Concept

Basic Economic Problems of Society: How to Produce
Estimated Time:45s
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Topics

Basic Economic Problems of Society

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