How to produce means the selection of technique for production .It has 2 aspects ÷1 labour intensive technique: it means more labour and less capital.2 capital intensive technique: it means more capital and less labour.
Once the decision regarding the goods to be produced is taken, the next problem as to what techniques should be adopted to produce the commodity arises. This function is related to the allocation of resources to production techniques which have to be employed during the production of goods and services.

It is a problem of choice when we have to select between consumer goods and capital goods …both are important for gdp growth….consumer good helps in present growth whereas capital good helps in future growth…thats what is how to produce……