Basic economy problems

To achieve maximum satisfaction, people need making the best choice as the guide, so five economics basic question need to be answered first.

1. What to produces

· This problem is concerned with that goods and services will be produces.

· This problem was happen because limited factors of production but demand for the goods and services is not limited.

· So, the firms will produces goods base on demand of the goods and the goods must give the maximum utility to people.

2. How much to produces

· The firm must decide how many quantity of the product should be produces.

· So, it must be base on total demand for the goods.

· If goods are high demand, the firm must produces with the high quantity.

3. How to produces

· How the goods will produces, usually the firm will make decision either use the labor intensive or capital intensive.

· The producers will choice the intensive will decreasing the production cost.

4. For whom to produces

· This is the target market in to sell the product.

· This problem will cause the producer to decide to distribute the goods and services to society.

· The goods are distributing base on income of people.

· Usually, people with high income are able to consume more goods and services than people with low incomes.