Which of the following statements relate to the problem of - "How to produce"?
Answer & explanation
Correct answer: option 2
The problem of how to produce relates to means/methods of production of goods. It answers the questions like whether to use more labour or more machines, which of the available technologies to adopt in the production of each of the goods? The choice of whether adopting a labour intensive technique or a capital intensive method of production is called as the problem of "How to produce"?