How many of the following choices are a part of the central problem ‘What is produced and in what quantities?’
(A) Whether to produce more of food or more of luxury goods
(B) Whether to use more labour or more machines
(C) Whether to have more of basic education or more of higher education
(D) Whether to ensure a minimum amount of consumption for everyone
(E) Whether to have more of consumption goods or more of investment goods
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Three
‘What is produced and in what quantities’ is about which goods a society makes and how much of each.
(A) Whether to produce more of food or more of luxury goods — What to produce. It is a choice between two kinds of goods.
(B) Whether to use more labour or more machines — How to produce. It is about the method of production.
(C) Whether to have more of basic education or more of higher education — What to produce. It decides how much of each service to provide.
(D) Whether to ensure a minimum amount of consumption for everyone — For whom to produce. It is about how the output is shared among people.
(E) Whether to have more of consumption goods or more of investment goods — What to produce. It is again a choice between kinds of goods.
(A), (C) and (E) belong to this problem: three in all.
NCERT (2026-27): “What is produced and in what quantities? 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. … Whether to have more of basic education or more of higher education. Whether to have more of consumption goods or to have investment goods (like machine) which will boost production and consumption tomorrow.” “How are these goods produced? Every society has to decide on how much of which of the resources to use in the production of each of the different goods and services. Whether to use more labour or more machines.” “For whom are these goods produced? Who gets how much of the goods that are produced in the economy? … Whether or not to ensure a minimum amount of consumption for everyone in the economy.” |