Which of the following lists the three basic economic questions that every society must answer?

• A. What to produce, how to produce, and for whom to produce?
• B. How to allocate resources, how to set prices, and how to regulate markets?
• C. How to maximize profit, how to minimize cost, and how to increase demand?
• D. What is the opportunity cost, what is the marginal benefit, and what is the marginal cost?

Answer: (A)

Verified step by step guidance

1. Understand that every society faces scarcity, meaning resources are limited while wants are unlimited. This scarcity forces societies to make choices about resource allocation.
2. Recognize that the three fundamental economic questions arise from the need to decide how to allocate scarce resources efficiently. These questions are: What to produce? How to produce? For whom to produce?
3. Analyze each option given in the problem and identify which one directly addresses these fundamental questions about resource allocation and production decisions.
4. Note that 'What to produce?' involves deciding which goods and services should be made given limited resources.
5. Understand that 'How to produce?' concerns the methods and technology used in production, and 'For whom to produce?' deals with the distribution of goods and services among members of society.