Problems of an Economy:

What to produce and in what quantities?
The very first problem encountered by any economy is to decide what goods are to be produced and in what quantities or amount.

How to produce?
The second problem that arrives is how to harvest the given or available resources? That is, what technique is to be used for producing various goods and services?

Solution: It depends majorly on the nation’s endowment of resources in deciding the optimum technique. It has to be decided whether efficient production is possible through labour-intensive or capital-intensive techniques.

For Whom To Produce?

Finally, the purposeful distribution of final goods and services produced (national income) has to be done; that is, who gets what and how much? The economy needs to decide the best suitable mechanism for distribution of the final products among different segments of the society

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Managerial Economics