Multiple Choice
What is the fundamental problem that both producers and consumers face in economics?
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0. Basic Principles of Economics
Scarcity and Choice
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What is the basic economic problem faced by all societies?
A
Scarcity of resources relative to unlimited wants
B
The need to eliminate all government intervention
C
The determination of market prices
D
The existence of inflation in the economy
Verified step by step guidance1
Understand that the basic economic problem arises because resources are limited while human wants are unlimited.
Recognize that scarcity means there are not enough resources to produce everything people desire, forcing societies to make choices.
Identify that this scarcity leads to the need for allocation of resources and prioritization of wants.
Note that other options like government intervention, market prices, or inflation are important economic concepts but do not represent the fundamental problem.
Conclude that the basic economic problem faced by all societies is the scarcity of resources relative to unlimited wants.
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