Which of the following depicts the central problem of economy, 'How to produce'?

Option 1 -> Relates to 'For whom to produce' - distribution of medical services.

Option 2 -> Relates to 'What to produce' - choice between food or textiles.

Option 3 -> Relates to 'How to produce' - choice between labor-intensive or capital-intensive methods.

Option 4 -> Relates to 'For whom to produce' - distribution of output among individuals.

Hence, Option 3: Whether to use more labour for production or more machines -> The 'How to produce' problem concerns the choice of production technique. It involves deciding whether to adopt labor-intensive methods (using more workers) or capital-intensive methods (using more machines and technology). This choice affects cost, efficiency, employment, and the overall production process. Option 3 directly addresses this by questioning the mix of labor versus machinery in production -> correct