Question

The problem of "What to produce" covers the issue relating to:

• A. What goods are to be produced
• B. What qualities of goods are to be produced
• C. Both (a) and (b)
• D. Neither (a) nor (b)

Answer 1

The correct option is C Both (a) and (b)

Due to the basic economic problem of scarcity, it is essential to choose which of the unlimited human wants and needs will be fulfilled by using the limited resources. This choice is usually made collectively by each economy, the laws of demand govern what people want and then the laws of supply aim to match it at an equilibrium seeking to make a profit. Thus the "what to produce?" takes into account what goods will be produced and how much of the good will be produced.