What are the three central problems of an economy? Why do they arise?

1.	What are the three central problems of an economy? Why do they arise?
Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :The central problems of an economy are:(i) What to produce?this problem has two dimensions:(1) what good and services are to be produced2) in what quantity goods and services are to be produced(ii) How to produce?it refers to the technique of production:labour <a href="https://interviewquestions.tuteehub.com/tag/intensive-1047509" style="font-weight:bold;" target="_blank" title="Click to know more about INTENSIVE">INTENSIVE</a> technique and <a href="https://interviewquestions.tuteehub.com/tag/capital-908677" style="font-weight:bold;" target="_blank" title="Click to know more about CAPITAL">CAPITAL</a> intensive technique.(iii) For whom to producethis problem relates to the distribution of output in the economy.It has two aspects:Factoral distribution of income and inter-personal distribution of income.The central problems of an economy arises due to three <a href="https://interviewquestions.tuteehub.com/tag/reasons-1179183" style="font-weight:bold;" target="_blank" title="Click to know more about REASONS">REASONS</a>:a) The wants of the people are unlimited.b) The resources to satisfy these wants are limited.c) These limited resources have alternative uses.</body></html>

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