Every society must answer three fundamental economic questions due to the scarcity of resources and unlimited human wants. These questions are:
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What to produce?
This question involves deciding which goods and services should be produced and in what quantities. Societies must prioritize based on their resources and the needs and wants of their population, such as choosing between healthcare, education, consumer goods, or capital goods. -
How to produce?
This concerns the methods and resources used in production. Societies decide whether production should be labor-intensive or capital-intensive, what technology to use, and how to utilize natural resources efficiently and sustainably. -
For whom to produce?
This addresses the distribution of goods and services among members of society. Decisions must be made about who receives the output, whether distribution should be equal or based on factors like effort and skill, and how to balance equity and efficiency.
These questions reflect the core economic problem of scarcity and resource allocation, shaping a society's economic system and influencing its standard of living, growth, and sustainability
