Tag: economic reconstruction

The central problems of an economy deals in the production of goods as resources are scarce so there is need to answer some questions where it is decide that :

• ·         What to produce? Consumer goods or capital goods?
  
• ·         How to produce? Using labour or capital?
  
• ·         For whom to produce? Rich people or poor people?

The cost of the next best alternative foregone is termed as opportunity cost. Opportunity cost, in terms of production of a commodity refers to the resources which the producer has to sacrifice in terms of the next best alternative which could have been produced using them, in order to produce every unit of the given commodity.

The cost of the next best alternative foregone is termed as opportunity cost. Opportunity cost, in terms of production of a commodity refers to the resources which the producer has to sacrifice in terms of the next best alternative which could have been produced using them, in order to produce every unit of the given commodity.
Therefore, opportunity cost is a result of scarcity of resources in the economy.

When there is excessive income in the economy then a large part of it is spent on consumption of goods and services and its a human tendency that human needs are unlimited, so when the selection is done between various commodities in the market it is very difficult for all the consumers to decide the product being rational so they face problems inchoosing the product.  

Economic insecurity describes the risk of financial loss faced by workers and households as they encounter the changeable events of social life. Our re-considerations suggest a four-part structure for studying the distribution and trend in these economic risks. 

First is that a centre on households captures the micro-level risk pooling that can smooth income flows and stabilize economic well-being. 

Second, insecurity is related to income instability and the risk of downward mobility into poverty. 

Third, difficult events such as unemployment, family closure, or poor health commonly trigger income losses. 

Fourth, the belongings of difficult events are explanatory by insurance relationships provided by government programs, employer benefits, and the familiar maintain of family. 

The correct option is D.

The most serious economic problems in India are:

Opportunity cost of production of a commodity refers to the resources which have to be sacrifice in terms of the next best alternative which could have been produced using the same resources.
Therefore, the next best alternative which could be produced on the piece of land mentioned here is 80 tonnes of wheat, which is sacrificed for the production of 100 kg of rice.

The question for "How to produce?" is faced by the economy they should consider both labour intensive techniques as well as capital intensive techniques depending upon the availability of resources in the economy.

Scarcity of resources refers to the situation where resources are limited in quantity and have alternative uses in production of various commodities. So the problem of these scarce resources is reflected in the aggregate supply of the economy which is also limited owing to limited source of inputs and unlimited demands as human wants are unlimited.