ECONOMIC QUESTIONS

In allocation of resources in the production of goods and services,an invester(entrepreneurs) face a number of fundamental economic questions nemed below: 

    1. What to produce? 

Here the Entrepreneur needs to decide on the nature of the goods to produce. he/ she may decide to produce capital goods or consumer goods. 

    2. How to produce? 

The producer has to decide on the methods and techniques to be used in the production process. The producer may decide to use capital intensive techniques of production or labour intensive techniques of production. The technique of production minimises costs while at the same time maximises the level of output. 

    3. When to produce? 

The producer is required to decide whether to produce now or to produce in future. The producer is normally guided by the demand for the products in the market. The best time for production is when the demand for the goods or services is the highest.

    4. Where to produce? 

The producer has to determine on the location of his or her firm or industry. The location will depend on availability of the market, the source of raw materials, security and transport and communication networks. All in all, a thorough assessment of the impact of that firm to the environment must be carried out and evaluated. 

    5 For whom to produce? 

The producer considers the target consumers that will use the goods to be produced. The produce may be for the young, the rich, the poor, the rural people or for the urban people. To sum up, the above mentioned questions help an investor to allocate effectively and profitably. if one or two questions remained un answered, we advise you to study carefully the feasibility plan of your ventures. 

 prepared by NSHIMIRYAYO ANGE