Explain the problem of "for whom to produce".

1.	Explain the problem of "for whom to produce".
Answer» What to produce and in what quantity: It is the problem of choosing which commodities should be produced and in what quantities. The goods can be consumer goods (like wheat, cloth, shoes, sugar, etc.), producer goods (like machine, tools, etc.), necessities (such as food, clothing, housing, etc.), luxuries (such as car, colour TV, refrigerator etc.). The society has to decide which goods should be produced in view of limited resources. The guiding principle is to allocate resources in a way that generates maximum aggregate utility.

Answer»

What to produce and in what quantity:

It is the problem of choosing which commodities should be produced and in what quantities. The goods can be consumer goods (like wheat, cloth, shoes, sugar, etc.), producer goods (like machine, tools, etc.), necessities (such as food, clothing, housing, etc.), luxuries (such as car, colour TV, refrigerator etc.). The society has to decide which goods should be produced in view of limited resources.

The guiding principle is to allocate resources in a way that generates maximum aggregate utility.

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