In the context of economics, societies are faced with three basic questions regarding the production of goods. Which of the following correctly identifies these three questions?

• A. What to produce, how to produce, and for whom to produce?
• B. How much to save, how much to invest, and how much to consume?
• C. Who should work, who should own, and who should manage?
• D. Where to produce, when to produce, and how to distribute?

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the fundamental economic problem that societies face, which is scarcity—limited resources versus unlimited wants. This leads to the need to make choices about resource allocation.
2. Step 2: Recognize that the three basic economic questions arise from this scarcity and the need to decide how to use resources efficiently. These questions are: What goods and services should be produced? How should these goods and services be produced? And for whom should these goods and services be produced?
3. Step 3: Analyze each option given in the problem to see which set of questions aligns with the fundamental economic problem. The first option, 'What to produce, how to produce, and for whom to produce,' directly addresses the allocation of resources and distribution of output.
4. Step 4: Understand why the other options do not fit as the basic economic questions: 'How much to save, invest, and consume' relates more to personal finance decisions; 'Who should work, own, and manage' relates to organizational structure; 'Where to produce, when to produce, and how to distribute' are more specific operational decisions rather than fundamental economic questions.
5. Step 5: Conclude that the correct identification of the three basic economic questions is 'What to produce, how to produce, and for whom to produce,' as these questions guide the allocation of scarce resources in any economy.