Which of the following reflects the 'what to produce' decision in economics?
Show answer & explanation
Correct answer: A
Explanation
Answer: Choosing between capital and consumer goods
Explanation
The fundamental economic problem involves three key decisions:
What to produce
How to produce
For whom to produce
The decision of “what to produce” refers to selecting which goods and services should be produced in an economy given limited resources.
In this context, choosing between:
Capital goods (machines, factories)
Consumer goods (food, clothes, daily-use items)
directly represents the “what to produce” problem.
Additional Key Points
This is part of Microeconomics
Economies must allocate scarce resources efficiently
Capital goods support future production
Consumer goods satisfy immediate needs
This choice reflects resource allocation and prioritization
Potential Questions & Answers
Q. What are consumer goods?
Ans: Goods used directly for consumption
Q. Which branch of economics studies such basic economic problems?
Ans: Microeconomics