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Question
Explain the central problem of "choice of technique".
Solution
The central problem of “choice of technique” is related to the allocation of resources to production techniques which have to be employed during the production of goods and services. The production of goods and services can take place in two ways –labourintensive technique and capital intensive technique. The labour-intensive technique involves more of labour and less of capital in the output, while it is reverse for the capital intensive technique.
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