Define an economy. Explain the economic problem.

Define an economy. Explain the central problem of an economy.

Expert Solution

Economy is a system by which people of an area earn their living.In real life ,we see many commercial offices like roadways, factories, railways, shops, farms and offices etc. All these units are engaged to earn income.

Economic Problem : Economic problem is concerned with the use of scarce resources among alternative human wants and in using these resources towards, the end of satisfying wants aa fully as possible.

Basic or central problem of an economy

There are some basic economic problem in every economy. These are also called the basic or central problems of an economy.

Prof.Samuelson refers to the basic or central problems of an economy as what, how and for whom to produce.

Some basic problems of an economy :

A) Problem regarding allocation of resources.

B) Problem regarding efficient or full utilisation of resources.

C) Problem regarding growth of resources.

D) Problem regarding economic growth.

Economy is a system by which people of an area earn their living.

Komal Hooda answered 2 years ago

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