Question

In the decision of "how to produce", what must the economy decide on?

• A. Types of goods to be produced.
• B. Quality of goods to be produced.
• C. Consumer goods and capital goods.
• D. Method of production.

Answer 1

Answer: (D)

Method of production.

The question for "How to produce?" is faced by the economy. Here they should consider both labour intensive techniques as well as capital intensive techniques depending upon the available resources in the economy.