Answer to Question #205834 in Macroeconomics for Nokuphiwa Khumalo

Question

the fundamental problem in economics is

Answer 1

The fundamental problem in economics is scarcity of resources and how we can produce and distribute them in the best way possible.

By being scarce, it means that the supply of goods and raw materials is finite , this is because resources are limited and can be used up. In economics, we face the problem of unlimited wants, in this case there is no end to the amount of goods and services that consumers would like to get.

Another key problem is deciding on what types and quantities of goods should be produced and also which alternative products should be produced and to what extent. The problem of production is also a key issue, that is , the method or techniques to be employed in carrying out production and defining the resources to be used.

We also have to look at the beneficiaries of the production, that is for whom are the goods or services produced.