Match List I with List II

Choose the correct answer from the options given below:

A-III, B-IV, C-I, D-II

Production, exchange and consumption of goods and services are among the basic economic activities of life. In the course of these basic economic activities, every society has to face scarcity of resources and it is the scarcity of resources that gives rise to the problem of choice.

Often a distinction is made between positive economic analysis and normative economic analysis depending on whether we are trying to figure out how a particular mechanism functions or we are trying to evaluate it. In positive economic analysis, we study how the different mechanisms function, and in normative economics, we try to understand whether these mechanisms are desirable or not. Normative statement pronounces value judgements as these are opinions or suggestions whereas, positive statements are capable of empirical (statistical) verification as these are based on the facts.

The three central problems of an economy are what to produce, how to produce and for whom to produce.