Basic economic problems arise from scarcity. The three fundamental questions are: What to produce? (Which goods and services) How to produce? (Which techniques and resources) For whom to produce? (How to distribute output). Every economy must answer these through production choices, resource allocation, and distribution mechanisms. The WHAT question determines product mix (food, clothing, defense). The HOW question determines production methods (labor-intensive vs. capital-intensive). The WHOM question determines income distribution (market, planned, or mixed approaches). Production Possibility Curve (PPC) illustrates trade-offs. In India: What (agriculture, manufacturing, services), How (technology adoption), Whom (equity considerations). ICAI tests: Understanding these three problems, applying to specific economies, recognizing how different systems answer them. Exam tip: These three questions are interrelated; a change in one affects others. Questions asking about "scarcity resolution" often involve all three.