Duscuss the central problems of an …

The central problems of an economy can be defined as the problems faced by every economy in the world and they are particularly related with problem of choice, because of scarce resources, alternative uses of resources and unlimited human wants.

Central problems are divided into three categories -

1. What to produce  this problem is related with problem of choice of producing wether capital goods or consumer goods.

2. How to produce this problem is related with problem of choosing tecnique of production. The choice is to be made between capital intensive technique of production or labour intensive technique of production.

3. For whom to produce this problem is related with problem of choosing for which group of people goods are to be produced. Wether production is to be done for richer section of society or poorer section of society.