Compilation of Notes on the Central Problems of an Economy with its solution for class 10, 11 and 12 students. Rich or poor, developed or undeveloped, every economy must face three central problems. These are: (A) What to produce? (B) How to produce? and (C) For whom to produce? Following is a brief description of these problems: (A) What to [...]
In this article we will discuss about the Role of Government in a Modern Economy. The government plays a very important role in a modern economy. Of course, there is controversy among economists regarding the optimal level of government intervention in the economy. However, the fact remains that government expenditure and taxation programmes exert considerable influence on national income, output [...]
In this article we will discuss about Consumer’s Sovereignty in an Economy. After reading this article you will learn about: 1. Meaning of Consumer’s Sovereignty 2. Limitations of Consumer Sovereignty. Meaning of Consumer’s Sovereignty: In a competitive economy, there is consumer’s sovereignty. This means: (a) That the consumer knows best what serves his welfare, and (b) That his preferences determine [...]