Explain the central problem of an …

The basic economic activities of life are production, distribution and disposition of goods and services. A society will be facing scarcity of resources during the time of fulfillment of these activities.   The central problems of an economy revolve around these factors. What to produce? It is one of the central problems that arise in an economy. It is related to the type of goods and services that need to be produced and the quantity to be produced. How to produce? This aspect deals with the process or technique by which the goods and services can be produced. Generally, there are two techniques that can be used for producing, which are: *Labour Intensive Techniques *Capital Intensive Techniques For whom to produce? This problem deals with determining the people who will be the final consumers of the goods produced. As the resources are scarce in an economy, it becomes difficult to cater to all sections of society.

The basic economic activities of life are production, distribution and disposition of goods and services. A society will be facing scarcity of resources during the time of fulfillment of these activities.
 

The central problems of an economy revolve around these factors.

1. What to produce?
   It is one of the central problems that arise in an economy. It is related to the type of goods and services that need to be produced and the quantity to be produced.
2. How to produce?

   This aspect deals with the process or technique by which the goods and services can be produced. Generally, there are two techniques that can be used for producing, which are:

   *Labour Intensive Techniques
   *Capital Intensive Techniques
3. For whom to produce?
   This problem deals with determining the people who will be the final consumers of the goods produced. As the resources are scarce in an economy, it becomes difficult to cater to all sections of society.