The basic economic activities of life are production, distribution, and disposition of goods and services. A society will be facing scarcity of resources during the time of fulfillment of these activities.
Scarcity is evident, due to the availability of limited resources, and human needs having no limit. This variation between the supply and demand leads to the formation of central problems of an economy.
The central problems of an economy revolve around the following factors:.
- What to produce?
- How to produce?
- For whom to produce?
