When a firm decides on the right mix of capital and labor to use, which of the three basic economic questions does it answer? Choose 1 (Choice A) A Where to produce goods and services?
(Choice B) B How to produce goods and services?
(Choice C) C When to produce goods and services?
(Choice D) D What to produce?
(Choice E) E To whom do these goods and services go?

The basic economic questions that a firm should use when its want to decides on the right mix of capital and labor to use is "How to produce goods and services?"

The basic economic questions that firm faced in production includes:

Before production, a firm must decide how to produce it.

That is, it must decide how much labor to use and how much capital to use on investments like machinery, equipment etc.

Hence, the basic economic questions that a firm should use when its want to decides on the right mix of capital and labor to use is "How to produce goods and services?"

Therefore, the Option B is correct.

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(Choice B) B How to produce goods and services?

Explanation:

The question "How to produce goods and services" addresses directly the problem of the factors or production: capital and labor.

Before producing anything, the firm must decide how to produce it. In other words, it must decide how much labor to use (how many workers it wil hire), and how much capital to use (how many investments in things such as machinery, equipment, and so on).

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