Question

what are the best way to solve these economic problem and why?

Us?? economy

Answer 1

Human wants are unlimited but the economic resources to satisfy these wants are limited and have alternative uses. Since the resources are limited, the individual has to choose between alternative use of the available resources. This is known as economic problem. Scarcity of resources having alternative uses is the major cause of an economic problem. Like an individual, every economy also possesses limited resources. Economy has to face various choice problems. Here are the best ways to solve the economic problems:-

1). Economy should decide clearly that which goods and services will be produced and in what quantities.

2). Economy should clearly mention about the technique of production (i.e., labor intensive or capital intensive) to be used for producing the goods.

3). Economy should properly distribute produced goods and services (i.e., income and wealth) among the factors of production (land, labor, capital and enterprise) in the form of rent, wages, interest and profit.