Economics Theory 1. Describe The Fundamental Economic Problem?
Any economic system has to deal with some fundamental economic problems. These problems are common to all economies. The following list gives the Four most fundamental economic problems faced by any economy.

1- What to produce?
2- How much to produce?
3- How to produce?
4- For whom to produce?
How these problems are dealt with differ from one economic system to another.
OR
The fundamental economic problem is simply the problem facing a society on how it chooses to utilize its finite amount of labor and resources to satisfy the seemingly infinite number and variety of human wants and needs.
Economics is the way in which ruling bodies prioritize their resources and strive to ascertain which needs and wants of the populace are most deserving of being satisfied.
The fundamental needs of society tend to be the ones that are most frequently addressed; such as food, clothing, warmth and shelter. As such, most economies across the world today attempt to consistently provide for the needs of the people in their society.
Once the basic needs of humanity are addressed, the population drives demand for any extra goods and services. A personal computer is an example of an item somebody wants above basic needs. This demand is met by companies making computers and selling them to the public.
The issue of choice is also important. Businesses realize consumers have a choice about which items to demand and as such, to become more economically viable, they must make a choice about which items and services to supply.
At its heart, the fundamental economic problem is about meeting the needs of the people through supply and demand. It has to address the basic needs of the population, and also their wants and choices of goods and services. The crux of the problem lies in prioritizing which of the wants and choices should be met first.

* Different between private and public company:
The distinction between a public company and a private company are explained in the following manner:
1. Minimum number of members
The minimum number of person required to form a public company is seven, whereas in a private company their number is only two.

2. Maximum number of members
There is no limit on the maximum number of member of a public company, but a private company cannot have more than fifty members excluding past and present employees.

3. Commencement of Business
A private company can commence its business as soon as it is incorporated. But a public company shall not commence its business immediately unless it has been granted the certificate of commencement of business.

4. Invitation to public
A public company by issuing a prospectus may invite public to subscribe to its shares whereas a private company cannot extend such invitation to the public.

5. Transferability of shares
There is no restriction on the transfer of share In the case of public company whereas a private company by its articles must restrict the right of members to transfer the share.

6. Number of Directors
A public company must have at least three directors whereas a private company may have two directors.

7. Statutory Meeting
A public company must hold a statutory meeting and file with the register a statutory report. But in a private company there are no such obligations.

8. Restrictions on the appointment of Directors
A director of a public company shall file with the register a consent to act as such. He shall sign the memorandum and enter into a contact for qualification shares. He cannot vote or take part in the discussion on a contract in which he is interested. Two-thirds of the directors of a public company must retire by rotation. These restrictions do not apply to a private company.

9. Managerial Remuneration
Total managerial remuneration in the case of public company cannot exceed 11% of net profits, but in the case of inadequacy of profit a minimum of Rs. 50, 000 can be paid. These restrictions do not apply to a private company.

10. Further Issue of Capital
A public company proposing further issue of shares must offer them to the existing members. A private company is free to allot new issue to outsiders.

11. Name
A private company has to use words ‘private limited’ at the end of its name. But a public company has to use only the word ‘Limited’ at the end of its name.

What is frequency distribution
A frequency distribution is a summary of how often different scores occur within a sample of scores.
For example, let’s suppose that you are collecting data on how many hours of sleep college students get each night. After conducting a survey of 30 of your classmates, you are left with the following set of scores:
7, 5, 8, 9, 4, 10, 7, 9, 9, 6, 5, 11, 6, 5, 9, 10, 8, 6, 9, 7, 9, 8, 4, 7, 8, 7, 6, 10, 4, 8
In order to make sense of this information, you need to find a way to organize the data. A frequency distribution is commonly used to categorize information so that it can be interpreted quickly in a visual way. In our example above, the number of hours each week serves as the categories and the occurrences of each number are then tallied.
Using the information from a frequency distribution, researchers can then calculate the mean, median,mode, range and standard deviation. Frequency distributions are often displayed in a table format (as you can see in the example found below), but they can also be presented graphically using a

Example of Frequency Distribution:
Consider the frequency table for the students in a class where the data has been grouped according to the height of the students.
Range of height Total number of student's cumulative frequency
3.0 - 4.5 feet 15 15
4.5 - 5.0 feet 20 35

Types of Frequency Distributions:
There are three types of frequency distributions. 1. Cumulative frequency distribution, 2. Grouped frequency distribution, 3. Cumulative Grouped frequency distribution.

Cumulative frequency distribution (type 1):
The cumulative frequency can be found from the frequency distribution by adding the cumulative frequency column. The highest cumulative frequency should be equal to the total number of frequencies
Temperature Frequency Cumulative frequency
47 3 22
46 3 19
45 4 15
44 3 12
43 3 9
Grouped frequency distribution (type 2):
The grouped frequency distribution can be formed by grouping the values together into the class intervals. The range can be calculated using the maximum and the minimum values.
Data set for temperature
45 48 47 43 44
42 45 43 46 46
45 47 46 47 45
43 47 45 47 46
44 43 44 46 47
The grouped frequency distribution is given by
Class interval midpoint frequency
45- 47 46 15
42 - 44 43 7
Cumulative grouped frequency distribution (type 3):
In cumulative frequency distribution the cumulative frequency column is added to the grouped frequency distribution so that we can get the cumulative grouped frequency distribution.
Class interval midpoint frequency Cumulative frequency
45- 47 46 15 22
42 - 44 43 7 7