GENERAL KNOWLEDGE

Detailed explanation-1: -’Scarcity of economics’ is the central problem of economics. It means that the resources in the world are limited whereas the wants of a man are unlimited and never ending. Due to this, the resources are always insufficient to satisfy all human wants and needs.

Detailed explanation-2: -Simply but, choice problem is the central problem of an economy. Scarcity of resources having alternative uses in relation to demand gives rise to the problem of choice-called central problem. Every economy has to decide how much resources are to be used in production of different goods and services.

Detailed explanation-3: -The central problem of an economy does not deal with the time of production as it is assumed that human wants are unlimited and goods are required throughout the year. Therefore, the the problem of ‘When to produce?’ is not regarded as a central problem of the economy.

Detailed explanation-4: -Answer: The three basic economic problems are regarding the allocation of the resources. These are what to produce, how to produce, and for whom to produce. The central problems of an economy is the production of goods and services, its distribution and indisposition/sales.