Which of the following is true?
- What to produce- Choice between labour intensive products or capital intensive products.
- How to produce- Whether capital goods should be used to produce the goods or not.
- Whom to produce- For which section of the society should the products be produced.
Answer & explanation
Correct answer: option 3
The correct answer is option 3: Only 3
The three fundamental economic problems are:
-
What to produce?
- This refers to the choice of goods and services to be produced based on the needs of the economy.
- The given statement ("Choice between labour-intensive products or capital-intensive products") is incorrect because it refers to the production method (which falls under "How to produce?").
-
How to produce?
- This refers to the technique of production – whether to use labour-intensive or capital-intensive methods.
- The given statement ("Whether capital goods should be used to produce the goods or not") is incorrect, as it does not fully capture the choice between different production methods (labour-intensive vs. capital-intensive).
-
Whom to produce?
- This refers to the distribution of goods and services – deciding which section of society will benefit from production.
- The given statement ("For which section of society should the products be produced") is correct.