what goods and services should be produced

“What goods and services should be produced?” is a core economic question about how a society decides what to make with its limited resources.

The basic idea

Economics assumes resources (land, labor, capital, technology) are scarce , so a country, firm, or household cannot produce everything people might want. Because of this, it must choose a mix of goods and services that best matches people’s needs and preferences.

How societies decide

Different economic systems answer “what to produce” in different ways:

• In a market economy, consumer demand and prices guide production; firms produce what they expect to sell profitably.

• In a planned economy, the government decides output targets based on social and political priorities.
• In mixed economies (most countries today), markets lead but governments nudge choices using taxes, subsidies, regulations, and public spending.

Modern context (2020s–2026)

Current global trends strongly influence what goods and services are being prioritized:

• Rapid growth of services such as digital platforms, finance, tourism, health, and education, which now make up a rising share of global trade.

• Expanding demand for green energy, clean technology, and climate-friendly infrastructure, shifting production toward renewable energy equipment, environmental services, and low‑carbon products.

• Continued growth of e‑commerce and logistics, boosting production of digital retail services, warehousing, and delivery networks.

Criteria for “should be produced”

Economists and policymakers often argue that the “right” goods and services are those that:

• Match consumer wants while respecting resource limits.
• Improve well‑being and productivity (healthcare, education, digital connectivity).
• Reduce long‑term risks like climate damage by favoring sustainable and resilient production choices.

In short, the question “what goods and services should be produced” is about using scarce resources to choose a mix of outputs that best satisfies people’s needs today without undermining the ability to meet needs in the future.