Basic economic problems Flashcards
1
Q
What are the 3 basic economic problems
A
What to produce
How to produce
Whom to produce for
2
Q
What is the use of the question ‘what to produce’
A
These answer questions which require a certain direction for resources to be directed in, as scarcity means that the economy cannot engage in all sectors
3
Q
What is the use of the question ‘how to produce’
A
Question of production being capital or labour intensive
4
Q
What is capital intensive production
A
When more machinery and technology is used in relation to labour
5
Q
What is labour intensive production
A
When more labour is used in relation to capital
6
Q
A
