Question

Whether to use more resources in education and health or to use more resources in building military services. Which of the central problems of an economy is accurate for this?

• A. How to produce?
• B. What to produce?
• C. Whom to produced?
• D. Where to produced?

Hint:

Remember: Allocation choice → What to produce? Technique choice → How to produce? Distribution choice → For whom to produce? This makes it easier to classify questions quickly in exams.

Answer 1

The Correct Option is B

Step 1: Recall the three central problems of an economy.
Every economy faces three fundamental problems due to scarcity of resources:
What to produce? – deciding which goods and services should be produced and in what quantity.
How to produce? – deciding the technique of production (labour-intensive or capital-intensive).
For whom to produce? – deciding how goods are distributed among different groups in society.
Step 2: Apply the concept to the question.
Here, the choice is between producing more of education and health services or more of military services. This is clearly about the allocation of scarce resources between different types of goods.
Step 3: Eliminate incorrect options.
- Option (A) How to produce? → relates to production technique, not relevant here.
- Option (C) Whom to produce? → relates to distribution among people, not relevant here.
- Option (D) Where to produce? → not a fundamental central problem of economics.
Step 4: Conclusion.
The correct economic problem being addressed is What to produce?
Final Answer: \[ \boxed{\text{What to produce?}} \]