What are the three basic economic questions? By: Paulina Ramires


The commodities which do not command positive prices in the market would not be produced. Therefore only those commodities with positive prices are to be produced and in such a way that would clear the markets.

How to produce

The choice of technique depends on the prices of the factors of production. That is, if labor is cheap and capital is expensive, a labor-intensive technique would be considered and vice-versa.

For whom to produce

Production, distribution and disposition of goods and services are the basic economic activities of life. In the course of these activities, every society has to face scarcity of resources. Because of this scarcity, every society has to decide how to allocate the scarce resources.


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