the economic problem?

Question

how does a market economy solves the economic problem?

Answer 1

Tough question.

Answer 2

The economic problem is scarcity. Unlimited wants, limited resources. We have to make choices about what to make and how much to make. The most efficient the better (no wasted resources). Therefore we need to match supply and demand as perfectly as possible.

The market solves the economic problem by being the most efficient method of matching supply and demand. Supply and demand will even out at an equilibrium price and quantity such that no extra is made (or the surplus is picked up on sale as the price falls) and thus no scarce resources are wasted.

Hope this helps,
Good luck

Answer 3

These are actually two questions.
Firstly 1]Colonist wanted to control sea routes,land routes for
business.They were getting protection money.
2] After the invention of high grade steel,gunpowder,industrial
revolution,the nomads of Central Asia,the Barbarians of Europe,
the seafairing countries of Europe and the Muslims tried to
conquer other countries and they were successful.They were
plundering the agricultural surpluses of that country and started slave trade.
3]When there were more civilised forms of government
they are trying to plunder the natural resources of the country
through treaties etc as has been done in Iraq,earlier in Iran.
4]Countries who have military srength somehow want to engage another country in warfare and spoiling the economic
condition of the country and started making unholy treaties.
5]Poor country with a dearth of knowledge workers cannot
make certain goods that are necessary for modern living.
These are being sold at high prices.The economy is doomed.
6] Nowadays WTO is forcing you to buy certain things which
a vast majority of the population do not require otherwise
they will boycott you.
7]In modernday democratic countries they are manipulating
the political structure of the country so that they can have their own people at the helm of the affairs.
8]Politicians are scoundrels and with the help of bureaucrats
police,military,judiciary,media they cling to power and
manipulate vote banks.They spoil the economy.
9]Nowadays they print currency notes and try to fool the people.India has an internal debt of Rs 40 lakh crores and
an external debt of $ 200 billion. It will take atleast 10 years
to partly solve the problem.Govt should not be allowed to do
deficit financing. A poor country should be run with lot of
consideration.
2nd question--
1]At present India has got a lot of population but scarce of
funds.This money can be given by rich countries only.
The rich countries want full freedom to trade in the host
country.The currency of the rich countries are overvalued
4 times in case of dollar.At present there is no agriculture
surplus in India and in coming decades it may not be possible
to have agricultural surplus to bulid industries.There is no other way but to invite foreign money at their terms. Market
economy is one of these terms. Unless the fruit of market
economy percolates to the ordinary people the situation
will be dangerous.

Answer 4

by matching supply with demand