The inputs are available in limited quantities and human needs are virtually limitless, this raises the inevitability of the election. The need to choose is evident when considering the three fundamental problems to which every society must respond: What to produce? How to Produce? Who to Produce?
What to produce?
What bins and service will be produced and in what quantity? Will many consumer goods in Economics be produced as clothing, or will more attention be paid to investment funds such as factories, which will increase future consumption? Will they produce many dresses of poor quality or little of a good quality? Will the production of material goods such as food and automobiles increase or will the production of entertainment services such as concerts and theater performances be enhanced?
How to Produce?
How will goods and services be produced? With what resources and with what technique will companies produce? What people will develop each of the different activities? Will the energy use come from hydraulic, thermal, nuclear or solar power plants? Will the production be primarily handcrafted or mechanized so that robots can even be used? Will large companies be privately owned or publicly owned?
Who to Produce?
Who will the production be for? Who will consume the goods and services produced? In other words, how will the total national production be distributed among different individuals and families? Is it that the distribution of income will be equal or, on the contrary, will it allow for very sharp differences?
Individuals decide what products and services they will buy, what profession they will dedicate and how much money they will save. Companies decide what products and services they will produce and how they will produce them. Governments decide what projects and programs they will carry out and how they will be financed. These decisions are reflected in the budgets of the State. For more info about the economics and other areas of business, visit Business Study Notes. Business Study Notes provide complete notes of all the areas of business education, especially the students of Mba, Bba, and Dba can easily get ready for exams.