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THE BASICS OF ECONOMIC PROBLEMS

The economic problem is one of the fundamental economic
theoretical principles in the operation of any economy. It asserts
that there is scarcity; that is, that the finite resources available are
insufficient to satisfy all human wants and needs. The question then
becomes how to determine what is to be produced, and how the
factors of production (such as capital and labor) are to be allocated.
Economics revolves around methods possibilities of solving this
fundamental economic problem.
The economic problem arises mainly due to two facts: human wants
are unlimited, but the means to satisfy human wants are scarce.

ECONOMIC PROBLEMS: SCARCITY AND CHOICE

The three basic questions
Every society has some system or process that transforms its
scarce resources into useful goods and services. In doing so, it must
decide what gets produced, how it is produced, and to whom it is
distributed. The primary resources that must be allocated are land,
labor, and capital.

WHAT, HOW, TO WHOM IT IS PRODUCED

What gets produced?
Societies have to decide the best combination of goods and services
to meet their needs. For example, how many resources should be
allocated to consumer goods, and many resources to capital goods, or
how many resources should go to schools, and how many to defence,
and so on.
How it is produced?
Societies also have to decide the best combination of factors to
create the desired output of goods and services. For example,
precisely how much land, labour, and capital should be used to
produce consumer goods such as computers and motor cars.
To whom it is distributed?
Finallly, all societies need to decide who will get the output from the
countrys economic activity, and how much they will get. For example,
who will get the computers and cars that have been produced? This is
often called the problem of distribution.

IMPORTANCE OF RESOURCES
Resources are important because they are used to make goods and
provide services.
THE BIG IMAGE IS THAT THE BALANCE IN OUR NEEDS AND WANTS
DOES NOT EQUAL TO THE AMOUNT OF RESOURCES AND ITS
AVALABILITY

SOLUTIONS TO THE ECONOMIC PROBLEMS

We must raise awareness in society to how scarce resources are.
If we can use resources more efficiently, it will give us more for less.
As a result, both society and individuals will become more affluent.
The key is to exploit the potential that technology offers. We also
need, however, to find new solutions and take advantage of the
potential inherent in tried and tested solutions.

VIDEO

WE SUMMARIZED THE PROBLEMS INTO A VIDEO

THANK YOU
GUYS!!!!