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3. Three Basic Economic Problems
 
Because of scarcity, every economy has to face three basic economic problems :
   
  A. WHAT to produce
 
Since we do not have enough resources, we have to decide what types and what quantities of goods are to be produced.
 
  B. How to produce
 
To economize the scarce resources, i.e. to produce the maximum output with a given amount of resources, we have to decide what methode of production are to be employed.
 
  C. FOR WHOM to produce
 
Since the goods services produced are not sufficient, there is a problem of how to allocate them among the people.
 
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