The decision of whether to use labour or capital intensive techniques in production process is a problem of

Step 1: Analyze the question The question asks which basic economic problem is involved when a producer chooses between labour-intensive and capital-intensive techniques.

Step 2: Explain the concept Every economy must answer the fundamental economic questions:

• What to produce? Which goods and services, and in what quantities.
• How to produce? Which method or technique of production to use, such as labour-intensive (more workers, fewer machines) or capital-intensive (more machines, fewer workers).
• For whom to produce? How output is distributed among members of society.
• When to produce? The timing of production, which is sometimes included.

Step 3: Apply it to the question Choosing between labour and capital intensive techniques means choosing the combination of factors of production, or the method of production. For example, a Nigerian farmer can use many farm hands with hoes (labour-intensive) or tractors and harvesters (capital-intensive). This is the "how to produce" problem.

Step 4: Consider option C (resource allocation) Resource allocation is a broad umbrella term covering all of the basic problems. "What, how and for whom to produce" are all aspects of it. However, the question asks about a specific choice of technique, and that corresponds directly to **"how to produce.

Step 5: Answer The correct option is B. how to produce.

Tip: Link keywords to the questions:

• Labour- or capital-intensive, technique, method → How to produce
• Types or quantities of goods → What to produce
• Distribution, income, consumers → For whom to produce