question_answer

Explain the central problem of 'choice of technique'.

Or

Explain the central problem of 'for whom to produce'.

 

Answer:

How to Produce: This is the second major central problem faced by the economy ever. Basically, there are, two choices of techniques i.e.,

(i) Capital intensive technique. This is the technique, in which capital is required more than the labour.

(ii) Labour intensive Technique. This is the technique, in which labour is required more than the capital.

Or

For whom to produce: An economy faces major central problem i.e., for whom the production is to be done. Production/Income is distributed among.

(i) Functional Distribution

(ii) Personal Distribution.