The term economic problem is a phrase which is commonly used in economic theory. It arises out of the fact that on one hand, the wants of human beings are unlimited or infinite and the resources, on the other hand, are limited, and hence there can never be a balance between the unlimited or infinite human wants and the limited resources.
Economic problems are crucial decisions which involve what types of goods and services should be produced in an economy. Economic problems mainly focus on such areas or sectors of the economy such as public services, housing, agriculture and manufacturing. They also determine how the four factors of production, namely land, labour, capital and enterprise, should be used, how the goods and services should be produced, whether they should focus on capital-intensive or labour-intensive activities and the efficiency. Land earns rent, labour earns wages, capital earns interest and enterprise earns profit.
Economic problems are crucial decisions which involve what types of goods and services should be produced in an economy. Economic problems mainly focus on such areas or sectors of the economy such as public services, housing, agriculture and manufacturing. They also determine how the four factors of production, namely land, labour, capital and enterprise, should be used, how the goods and services should be produced, whether they should focus on capital-intensive or labour-intensive activities and the efficiency. Land earns rent, labour earns wages, capital earns interest and enterprise earns profit.
