A society faces the following common and basic economic problems.  What is produced in what quantity? – Problem on resource allocation

• How to produce? -problem on technology use
• For whom to produce? – Problem on how to distribute production
• Basic economic problems arise due to limited resources, alternative uses of resources
  and unlimited human wants

Basic economic problem of What to produce in what quantity, arises due to the following reasons

• Available resources are limited
• Resources have alternative uses
• Human wants are unlimited

Two types of main technology could be identified when we find solutions to the basiceconomic problem of How to produce?

• Labor intensive technology
• Capital intensive technology

Basic economic problem of What to produce in what quantity arises due to the following reasons

• Available resources are limited
• Resources have alternative uses
• Human wants are unlimited

Two types of main technology could be identified when we find the solution to the basic economic problem of How to produce?

• Labor intensive technology
• Capital intensive technology

The basic economic problem of How to produce? arises due to the following reasons

• Alternative combinations of factors of production
• Change in comparative cost
• Limited resources

The basic economic problem, “for whom to produce?” arises due to the following reasons

• Limitation of the quantity of goods produced
• Change of personal purchasing power

Even though the basic economic problems are common for all the method used to solve the problem differs from society to society