Final answer:
The preferred type of item to satisfy agency needs is both goods and services, as both are integral to meeting the needs and wants of those served by the agency. The production and allocation are based on economic principles and questions of for whom the goods and services are produced.
Step-by-step explanation:
The preferred type of item to satisfy agency needs can be both goods and services, as agencies require these to meet needs and wants of the people they serve. Economic products are both goods and services that are transferable, scarce, and useful. This includes consumer goods like shoes and backpacks, as well as capital goods like bulldozers for construction. Goods and services are subject to laws of demand and supply, with their consumption often increasing with rising income, making them normal goods.
Decisions on what goods will be produced, how they will be produced, and for whom they will be produced are central to the economic system. For example, the allocation of energy resources is a 'for whom' question that reflects on who receives the produced goods and services.