Tag: major economic problems

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

Economics is the study that establishes an effective relationship between unlimited wants and the availability of scarce resources to overcome the economic problem of limited resources so that all the unlimited wants are satisfied, so as to achieve maximum utility by the use of scarce resources. 

Over-population is one of the biggest problem of Indian which give rise to many other economic problems like poverty as many people are not able to attain a comfortable lifestyle due to scarce resources and unemployment because due to overpopulation and limited jobs people remain unemployed. 

In economics, sustainable development is given the upmost priority as it refers to fulfilment of current economic needs of the people without sacrificing the ability of the future generation to need their needs but if the scarce resources will be consumed in large amount then future generation will not be able to meet their needs and it will result in slower economic growth. Therefore, scarcity can only be cured by limiting needs and wants. 

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.