Multiple Choice
An opportunity cost can make decision making difficult because _____.
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
Scarcity exists because of:
A
limited resources and unlimited wants
B
efficient allocation of resources
C
unlimited resources and limited wants
D
government intervention in markets
Verified step by step guidance1
Understand the concept of scarcity in microeconomics: Scarcity arises because resources are limited while human wants are unlimited.
Analyze each option by comparing it to the definition of scarcity:
Option 1: 'limited resources and unlimited wants' aligns with the fundamental cause of scarcity.
Option 2: 'efficient allocation of resources' is a way to manage scarcity, not the cause of it.
Option 3 and 4: 'unlimited resources and limited wants' and 'government intervention in markets' do not describe scarcity correctly.
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