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Main Economics Problem

The document summarizes the main economics problems discussed in chapter 2. It outlines three main problems: 1) what and how many commodities to produce, 2) how to produce the commodities, and 3) who the commodities will be produced for and distributed to. It also discusses concepts related to the economic problem such as human needs, wants, choice, and the assumptions made in economics around self-interest and the market mechanism satisfying wants.

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Rido Siregar
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46 views

Main Economics Problem

The document summarizes the main economics problems discussed in chapter 2. It outlines three main problems: 1) what and how many commodities to produce, 2) how to produce the commodities, and 3) who the commodities will be produced for and distributed to. It also discusses concepts related to the economic problem such as human needs, wants, choice, and the assumptions made in economics around self-interest and the market mechanism satisfying wants.

Uploaded by

Rido Siregar
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Group 3 of Economics Explaining about chapter 2 Main Economics Problem

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Arrangement of the group : 1. Farhan Bayu Desanto 2. Fiedy 3. Rido 4. Suci Ningsih 5. Wahdania Ayuni
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Main Economics Problems In production planning, each economic organization will encounter three main problems such as : 1.What and how many the commodities which must be produced?In other words, how many goods and merit which must be produced?What kinds of goods and merit which will be produced? Therfore, the problems are in the form of numbers and kinds of goods and merit which must be produced by the economics.
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2.How must the commodities be produced?in other words, who do the production process, what kinds of combinations of production factors, and what kinds of techniques? In order to be able to solve those problems, private producers or gonvernment must determine the production techniques which are effective and efficient.

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3.For whom must the commodities be produced? who will get benefits from the existence of goods and merits in countrywide?On in other words, hoew the national products are distributed to each person? To answer this question, private producers or government must do market analyses for determining the consumers who will use goods and merits.
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Concepts in the economic problem Needs Human needs are material items people need for survival, such as food, clothing, housing and ware. Until theIndustrial Revolution, the vast majority of the worlds population struggled for access to basic human needs.

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Wants While the basic needs of human survival are important in the function of the economy, human wants are the driving force which stimulates demand for goods and services. In order to curb the economic problem, economists must classify the nature and different wants of consumers, as well as prioritize wants and organize production to satisfy as many wants as possible.

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One assumption often made in mainstream neoclassical economics (and the methods which attempt to solve the economic problem) is that humans inherently pursue theirself-interestand the market mechanism best satisfies the various wants different individuals might have. These wants are often classified intoindividual wants, which depend on the individual's preferences andpurchasing power parity, andcollective wants, those of entire groups of people.
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Things such as food and clothing can be classified as either wants or needs, depending on what type and how often a good is asked for. Wants are effective desires for a particular product, or something which can only be obtained by working for it.

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Choice The economic problem fundamentally revolves around the idea of choice, which ultimately must answer the problem. Due to the limited resources available, businesses must determine what to produce first to satisfy demand. Consumers are considered the biggest influences of this choice, and the goods which they want must also fit within theirbudgetsand purchasing power parity. Different economic models place choice in different hands.
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The three economics problems will never be a problem if they can fulfill the following requirements: 1.Economics recources are provided in unlimitied numbers. 2.Every good and merit are easy to be produced and distributed to anyone who needs them. 3.Human need has been fulfilled. 4.Goods and merit have successfully been produced in unlimitied numbers so human can be obtained anywhere easily.
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