Why do central problems of an economy arise? Explain the central problem of “for whom to produce'?

Central problems arise in an economy because
i. Human wants are unlimited.
ii. Resources are scarce in relation to their wants. The resources available with each individual to satisfy their needs are limited. These individuals have to rationally manage their expenditure to promote economic interest.
iii. Resources have alternative uses. For example, land may be used for agricultural activity or for industrial purpose. Central problem - ‘For whom to produce’: ‘For whom to produce’ refers to the problem of distribution of final goods and services or the problem of distribution of income. It has two aspects. The first aspect relates to personal distribution and the second aspect relates to functional distribution. Personal distribution refers to output/income share of individuals or households in society. Functional distribution refers to income share of different factors of production. Here, the problem is whether allocation of resources is promoting equality or not. Equality is a social virtue, and inequality may induce high saving, investment and hence high rate of growth.