- What are the certain products to produce?
- Which items (rice, wheat, clothes, etc) which commodities, which goods are required to produced must be decided by an economy group and also which of the capital goods (machinery, equipment’s, etc.) are needed to be produced.
- Along the identical way, every corner of the economy must make a feasible choice between civil goods (bread, butter, flour etc.) and war goods (guns, tanks, rifles , etc.)
ii. How much to produce:
- After decision of the products that are needed to be produced are taken, economy needs to decide the amount of the quantity of each commodity that has been selected.
- The meaning of which that, if the involvement of the choice regarding the quantity to be produced as well as of consumer and capital goods, civil and war goods , and so on.
- Guiding Principle of ‘What to Produce’: Allocate the resources in such a rhythm which doesn’t fail to produce maximum amount of aggregate satisfaction.
