Basic Problems of An Economy — Economics STD 9 — Question
ICSE BoardEnglish MediumSTD 9EconomicsBasic Problems of An Economy3 Marks
Question
Explain the problem "What to produce" with the help of an example.###Explain the central problem of what to produce.
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Answer
Resources available to an economy are scarce. An economy cannot produce all that the society needs. This compels the economy to utilise its scarce means so that society gets maximum aggregate satisfaction. Example : From a given quantity of land, either wheat or cotton can be produced or a combination of them. If it is desired to produce more wheat and less cotton, land use will have to get diverted from cultivation of cotton to wheat.
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