1. Explain the problem of allocation of resources faced by an economy.

1.	1. Explain the problem of allocation of resources faced by an economy.
Answer» Central problems of an economy are. What to produce, How to produce, and For whom to produce. \'What to produce\' relates to the problem of choice of goods and services to be produced. \'How to produce\' relates to the choice of technique of production. It involves a choice between labour-intensive technique and capital - intensive technique. \'For whom to produce\' relates to the distribution of goods and services across different sections of the society. It focuses on the issue of Economic Equality.

Discussion