✅ The Economic Theory of Production answers the fundamental economic questions of what to produce, how to produce, and how much to produce. These questions are essential to understanding resource allocation and production decisions in an economy.

Breakdown of the Questions Answered by the Theory:

1. What to produce?
   This question addresses which goods and services should be produced in the economy. It involves the allocation of scarce resources to the production of goods that fulfill the needs and wants of consumers. This decision is influenced by consumer preferences, market demand, and economic conditions.

2. How to produce?
   This question involves the choice of production methods or techniques. It considers the combination of factors of production (labor, capital, land, and entrepreneurship) to produce goods and services efficiently. It also involves decisions regarding technology, labor specialization, and the most efficient use of resources.

3. How much to produce?
   This question refers to determining the quantity of goods and services to produce, considering the optimal use of resources, costs of production, and market demand. This also involves determining the equilibrium point where the supply of goods matches consumer demand.

The Correct Sequence:

• What to produce? (First question to determine goods/services based on demand)

• How to produce? (Second question regarding the method of production using available resources efficiently)

• How much to produce? (Third question regarding the optimal quantity to meet market needs and avoid wastage)