In a drought, some families get so little food that their survival is at stake. A central authority steps in to share the food more equitably. Which central problem does this deal with, and such action by a central authority is described as a feature of which type of economy?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → For whom to produce; centrally planned economy
Sharing the food among families is about who gets how much of the output. That is the problem of for whom to produce.
Stepping in when some people get so little that their survival is at stake is what a central authority may do in a centrally planned economy.
NCERT (2026-27): “For whom are these goods produced? Who gets how much of the goods that are produced in the economy? How should the produce of the economy be distributed among the individuals in the economy? Who gets more and who gets less?” “1.3.1 The Centrally Planned Economy In a centrally planned economy, the government or the central authority plans all the important activities in the economy. … In a different context, if some people in the economy get so little a share of the final mix of goods and services produced in the economy that their survival is at stake, then the central authority may intervene and try to achieve an equitable distribution of the final mix of goods and services.” |