The decisions that any society must make by the use of limited resources based on the economic problems are What to produce?, How to produce? And for whom to produce?
What is the economic problem?
As a form of social structure, economic systems must address and solve three fundamental economic problems.
- What to produce?
- How to produce?
- For whom to produce?
These three fundamental problems are called the economic problem.
The first problem involves the problem considering the production of the goods, means what products should be produced in the market. This decision is taken by the survey of the customers.
The second problem involves the decision regarding the techniques of the producing the goods, it includes, labor and capital incentive technique.
The third problem involves the decision regarding the distribution of goods in the market, that for whom the goods be produced.
Therefore, these are the three decisions that every society has to follow.
Learn more about the economic problem, refer to:
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