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central Proviems of am Economy a, , es, at the levels of consumers, pr, * Producers or for the, , reminds us that available scarce, , , , , , , , , , , problems and, , , , nomic, as a whole, , , , , , , , sing resoure en hn, ‘ling maximum wants. An ideal choice making, us in falling be known as ECONOMIST 12 for achieving the, , , , , , : Iternatives can be! is, ECONOMY \~, , so PROBLEMS OF AN, , gasiC OR CENTRAL i, 1.7. BASIC OR ms of multiplicity of wants, scarcity of resourees, basic_or central problems of an economy irces and, s around them., , Prof. Samuelson defines central problems of an economy as, “what, how and, , °° Prof. Halm considers central problems of an economy are seven in rumba:, ftwitch count this number as four and five respectively. However, most of the, following basic central problems of'an economy :, , sai, , (ii) How to produce ? t, (ili) For whom to produce ?, 2. Problem of Fuller or Efficient Use of Resources, 3. Problem of Growth of Resources n, 1.7.1. Allocation of Resources 1, , , , , , , , , , , , , , , , theory mostly re, “in narrow sense, for whom to produce, Prof. Stigler and Le, economists agree on the je, 1. Problem of Allocation of Resources, , , , , , , , (i) What to produce ?, , , , , , , Every.economy has limited tes6urces which can alternatively be used for producing different goods, and <ervices_There is a need far economising fesources so as maximum wants fulflled with, siven resources. It requires optimum allocation of resources in the production of different goods and, serviges 50 that it ideally meets the requirements of a community, While allocating these resources,, , , , , , , , , , , , following decisions need a special attention, , , , , , , , \BMifag to produce ? who, With imited resources, every economy has to decide, what <r Sa a a, what quantities 2Tf we produce excess quantify of @ cc ‘commodity, it will mean curtailing the production, of anéther. It will have to:choose what amount of €o1 i like food grains, cloth, sugar ete:, af Tae produced and what quantity of capital goods Ie consumer durables, machines-and durable, [ROS ae rend ta be produced Tachcleetes Ws be ea aria ree ae, : : a PA chok, i] How to produce 2_ ., , , , , , , , , , , e “i . chnlgos, . — roblem Tegarding allocation of resources is concerned with the Be, , , , Giet services Produced with following two techniques.