Multiple Choice
What is the basic economic problem faced by all societies?
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
If goods or services are scarce, which of the following must occur?
A
Scarcity has no impact on economic decision-making.
B
Individuals must make choices about how to allocate resources.
C
Prices will always remain constant.
D
There will be unlimited access to all goods and services.
Verified step by step guidance1
Understand the concept of scarcity: Scarcity means that resources are limited while human wants are unlimited, so not all desires can be satisfied simultaneously.
Recognize the implication of scarcity on decision-making: Because resources are limited, individuals and societies must decide how to allocate these resources efficiently.
Identify that scarcity forces choices: Since we cannot have unlimited amounts of all goods and services, individuals must prioritize and make trade-offs among alternatives.
Note that scarcity does not imply prices remain constant; prices can fluctuate based on supply and demand.
Conclude that scarcity leads to the necessity of making choices about resource allocation, which is fundamental to economic decision-making.
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