Problems and Fallacies in Economics

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

Micro Economics Micro Economics studies individual business decisions, such as allocation of resources and product pricing.

Macro EconomicsMacro economics deals with higher scale and studies government decisions instead of individual companies, such as GDP, employment, average per capita income

FallaciesFallacy of Composition: False assumption that what is true for one segment of an economy is good for the economy as a whole.Fallacy of Post Hoc Procter Hoc: Fallacy that when two events happen in a sequence, assuming that second event was caused by the first one is a post hoc procter hoc fallacy.Fallacy of Black, White Or Gray: Fallacy of false dilemma. Assuming you have an either-or choice when you don't actually.

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