The three basic economic questions that every society must answer are:
- What to produce?
This question involves deciding which goods and services should be produced and in what quantities, given the limited resources and unlimited wants of people. Societies must prioritize what is most needed or desired, such as healthcare, education, consumer goods, or capital goods
- How to produce?
This concerns the methods and resources used in production. Societies decide the most efficient way to produce goods and services, considering factors like labor intensity, capital use, technology, and environmental impact
- For whom to produce?
This question addresses the distribution of the produced goods and services among members of society. It involves decisions about who gets what and how much, which can be influenced by factors like income, social equity, and political systems
These questions arise from the fundamental economic problem of scarcity- resources are limited, but human wants are unlimited-requiring societies to make choices about resource allocation to maximize benefit
. Different economic systems (market, command, mixed) answer these questions in various ways, balancing efficiency, equity, and social goals
