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Question

Difficulty: MediumBasic Economic Problems of Society

A national planning committee must decide whether to allocate a newly reclaimed tract of fertile land primarily to growing staple food crops for domestic consumption or cultivating cocoa for international export. Which fundamental economic problem of society is directly addressed by this decision?

  1. What to produceAnswer
  2. B
    How to produce
  3. C
    For whom to produce
  4. D
    At what financial cost to produce

Answer

The decision directly addresses the fundamental problem of 'What to produce'.
The decision of allocating limited land between staple food crops and cocoa crops involves choosing which specific goods to manufacture or cultivate with scarce resources, which defines the basic economic problem of 'What to produce'.

Step-by-Step Solution

1
Identify the core decision presented in the scenario.
The committee is choosing between two alternative output types: staple food crops vs. cocoa export crops.
Because resources (land) are scarce relative to unlimited human wants, society must determine which goods to create.
2
Map the identified decision to the basic economic problems of society.
Choosing the combination and quantity of goods and services to produce corresponds to 'What to produce'.
'How to produce' deals with techniques, and 'For whom to produce' deals with distribution.

Key Concept

Basic Economic Problems of Society: What to produce
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Topics

Basic Economic Problems of Society

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