Question

The central problems of an economy are:

• A. What to produce?
• B. How to produce?
• C. For whom to produce?
• D. All of the above

Answer 1

Answer: (D)

All of the above

The central problems of an economy deals with the various decisions that need to be taken with regards to the production of goods so as to optimally allocate scarce resources. The problems are:
What to produce? Consumer goods or capital goods?

• How to produce? Using labour or capital?
  
• For whom to produce? Rich people or poor people?