Two friends Reena and Meena were discussing. Reena said, 'Every society must decide on how much of each of the many possible goods and services it will produce. Whether to produce more of food, clothing, housing or to have more of luxury goods.'
There are 3 central problems of an economy.
1. What to produce and in what quantities?
2. How to produce?
3. For whom to produce?
Which problem is Reena talking about in the above statement?

About 1

The Correct Answer is option 1: About 1 -What to produce and in what quantities?

Reena is discussing the first central problem of an economy, which is "What to produce and in what quantities?" She mentions the decision-making process regarding the allocation of resources among different goods and services, such as food, clothing, housing, and luxury goods.

"For whom to produce?" is one of the central problems of an economy because resources are limited, and not everyone can get everything they want. So, once it's decided what to produce and how to produce, the next important question is:

➡️ Who should receive the goods and services that are produced?

This means deciding:

• Which sections of society should get more (e.g., the rich, the poor, children, elderly)?

• Should the distribution be based on income, need, or social welfare?

• How much of the output should go to different groups?

This problem is basically about how the national income or goods and services are distributed among people, and it’s a key issue in achieving economic justice and equity.