In economics, the “how” or input question refers to:

Step 1: Analyze the question The question asks what the "how" (or input) question means in economics. It comes from the basic economic problems every society faces.

Step 2: The concept Every society must answer these fundamental questions because resources are scarce:

• What to produce: which goods and services, and in what quantities.
• How to produce: which production technique and what combination of inputs (land, labour, capital, entrepreneurship) to use. For example, labour-intensive or capital-intensive methods.
• For whom to produce: how output is shared among individuals and groups.

Step 3: Check each option

• A. Allocating scarce resources among competing uses is the general problem of scarcity and choice. It is mostly the "what to produce" question, not specifically "how".
• B. The way factors of production are combined to produce output is exactly the "how" or input question: the choice of production technique.
• C. A firm's profit-maximising output is a theory-of-the-firm topic (MC = MR), not the basic "how" question.
• D. How output is distributed among people is the "for whom" question.

Step 4: Answer The "how" question is about the method of production, meaning how factors of production are combined to produce goods and services.

Tip: Link each question word to its meaning:

• What = choice of goods (output)
• How = method or combination of inputs (production technique)
• For whom = distribution of output