Option 1: What to Produce? -> Deals with deciding which goods and services to produce.
Option 2: How to produce? -> Deals with the choice of technique of production (labor-intensive vs capital-intensive methods).
Option 3: For whom to produce? -> Deals with distribution of output among people in society.
Option 4: Problem of full employment of resources -> Deals with utilizing all available resources efficiently.
Hence, Option 2: How to produce? -> This central problem specifically addresses the choice of technique of production. It involves deciding whether to use labor-intensive methods (more workers, less machinery) or capital-intensive methods (more machinery, less workers), and what combination of resources should be used to produce goods and services most efficiently. This is a fundamental decision every economy must make based on resource availability, costs, and technological capabilities. -> correct