Human society at any stage of its development seeks to use its opportunities to obtain material wealth. What is the problem of economic choice? He needs to produce these benefits as much as possible.
Need a lot of goods
To do this, the manufacturer must maximize the use of available resources. He seeks to most effectively use his capabilities for the production of goods:
- Resources must be used purposefully with the greatest return (a little benefit from untrained personnel when working on CNC machines).
- Without the use of advanced technologies, it is difficult to achieve production growth (it is not necessary to do the work manually in the old fashioned way with a large selection of automatic machines).
Choosing, you need to make a decision in favor of one economic action and at the same time give up another. What is the problem of economic choice - how to implement both actions at the same time?
The manufacturer makes a choice, being in shortage of production resources. Consumer - between their desires and opportunities.
Economics and Choice
The problem of economic choice in the economy lies in three main issues.
- What exactly to release?
The entrepreneur, starting the production of a new product, must know that he will find his buyer.
Production is pointless if the product is not profitable. What is the problem? In the economic choice of the consumer.
A product is bought if it meets the needs of customers. And if they can afford to buy it. The manufacturer focuses not only on consumer tastes. He must take into account the possibilities of his production.
2. How to produce?
The entrepreneur determines the technology for the release of goods, evaluates the availability of resources. On the other hand, it takes into account the interests of the buyer. The price of the product should be attractive to him.
3. For whom to produce?
Studying the market niche and the target audience of consumers makes it possible to focus on specific needs. Do not spray resources and reduce the cost of releasing goods.
What is the solution?
Answering these questions, manufacturers understand what the problem of economic choice is.
It arises as a result of the fact that the possibilities for production are limited.
The solution is in the alternative. Replace the release of one product with another. At the same time, production opportunities, available technologies and the value of a new product are taken into account.
For example, the state does not have the ability to grow fruit. But there are many resources for the manufacture of electronics. The choice is made: reduced fruit cultivation and increased electronics output.
Making the right economic choice will help build a curve of production opportunities. It clearly shows that it is possible to increase the output of one product only by reducing the production of some other.