EXPERTS, PLS TELL ME THAT WHICH OPTION SHOULD I LEARN TO WRITE IN MY BOARD EXAMS FOR THE PROBLEM OF " FOR WHOM TO PRODUCE"
ALSO, TELL ME SOME EXAMPLE ALONG WITH THE PP CURVE.
I This is the question of how to distribute the product among the various sections of the society. National product is the total output generated by the firms. The total output ultimately flows to the households in the form of income,i.e., their wages, rent, interest and profit. There are millions of people in a society. Each one cannot get sufficient income to satisfy all his wants. This raises the problem of distribution of national product among different households. In economics, the problem of distribution of national product is studied under the theory of distribution.
II This is the problem of distribution of goods and services produced in the economy.
Goods and service are produced for those who have the capacity to buy them. Capacity to buy depends on income. More income means more capacity to buy. So, the problem 'for whom to produce' amounts to the problem of distribution of income among income-earners.
It should be kept in mind that production is the result of combined efforts of land,labour, capital and entrepreneurship. And income is distributed to these factors of production in the form of wages, rent , interest and profits.
The second part of you answer seems to be more appropriate.
Regarding the second part of the question imagine an economy producing two goods- normal rice (priced at Rs 15/kg) and graded rice (priced at Rs 100/kg). If the economy decided to cater to the needs of the lower section of the society, then it would produce more of normal rice and less of the graded rice. In such a case, the PPC curve will be as depicted in figure (ii).
On the other hand, if the economy decided to cater to the needs of the higher section of the society, then it would produce more of the graded rice and less of the normal rice. In such a case, the PPC curve will be as depicted in figure (i).
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