alleryWhen a society settles how the total output of goods and services will be shared among its members, it is solving the problem of:
AWhat to produce
BFor whom to produce
CHow to produce
DHow much to import
Answer & Solution
Correct answer: B. For whom to produce
1. Sharing output among members is a question of distribution.
2. Distribution of the 'national cake' is the 'for whom to produce' problem.
3. Hence this is 'for whom to produce'.
4. The choice of goods and the technique used are separate questions, eliminating the other options.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 1 Unit II "Basic Problems of an Economy and Role of Price Mechanism", p.1_
Keep practising Unit 5: Factor Markets & Resource Allocation
Browse all Unit 5: Factor Markets & Resource Allocation questions for CA Foundation, or explore more Economics topics.
Related questions
An economy in which the means of production are privately owned and the profit motive drivThe decision of whether cotton cloth should be made on handlooms or on automatic looms priA government deciding how many schools, hospitals and metres of cloth the nation should tuA resource gives rise to an economic problem only when it satisfies which pair of conditioThe technique of predicting future demand for goods and services on the basis of the past In the scope of Business Economics, internal or operational issues of a firm are addressedA science that states 'what is' and describes cause-and-effect relationships without any vA study of total consumption, total saving, total investment, and the overall level of emp