The correct option is 2 and 3 only.
Explanation
Every economy faces the problem of scarcity of resources relative to unlimited human wants. This necessitates choice, leading to three central problems of an economy: allocation of resources (what to produce), choice of technique (how to produce), and distribution of output (for whom to produce).
Statement 1 is Incorrect:
The problem of "What is produced" involves deciding which goods and services are to be produced and in what quantities. An economy must choose between different possible bundles of goods (e.g., consumer goods vs. capital goods) and determine the specific volume of each required. Therefore, it is directly related to the quantity of goods.
Statement 2 is Correct:
The problem of "How are these goods produced" refers to the choice of technique of production. The economy must decide whether to use labor-intensive techniques (more labor, less capital) or capital-intensive techniques (more machines, less labor) to produce goods efficiently.
Statement 3 is Correct:
The problem of "For whom are these goods produced" relates to the distribution of the final goods and services among the members of society. It addresses who gets how much of the goods that are produced, which depends on the distribution of income and purchasing power among individuals.
Key Takeaway:
The three central problems of an economy are What to produce (selection of goods and quantities), How to produce (choice of technology/method), and For whom to produce (distribution of income and goods).