Basic Economic Problems of Society - SS1 Economics Lesson Note

i. What to produce: This refers to the problem of deciding which goods and services to produce and in what quantity. Every society has limited resources, so it has to make choices about what to produce. Different societies make different choices based on their resources, culture, and preferences.

ii. How to produce: This refers to the problem of deciding on the best way to produce goods and services. It involves choosing the most efficient combination of labor, capital, and technology to produce goods and services at the lowest possible cost

iii. For whom to produce: This refers to the problem of deciding who should receive the goods and services produced. In a market economy, the price system determines who gets what, based on the ability and willingness to pay. In a command economy, the government decides who gets what based on social and political criteria.

iv. Efficiency of resource use: This refers to the problem of using resources in the most efficient way possible. It involves making the best use of available resources to maximize production and minimize waste.