Why is thinking economically considered an important skill?

• A. It guarantees that everyone will become wealthy.
• B. It allows people to avoid making choices altogether.
• C. It helps individuals and societies make better decisions about allocating scarce resources.
• D. It eliminates the need for trade-offs in decision-making.

Answer: (C)

Verified step by step guidance

1. Understand the core concept of economics: Economics studies how individuals and societies allocate scarce resources to satisfy unlimited wants and needs.
2. Recognize that scarcity means resources are limited, so choices must be made about how to use them efficiently.
3. Identify that thinking economically involves analyzing trade-offs, which are the alternatives given up when making a decision.
4. Realize that by thinking economically, individuals and societies can make better decisions to allocate resources in a way that maximizes benefits and minimizes costs.
5. Conclude that this skill is important because it helps manage scarcity and improve decision-making, rather than guaranteeing wealth or eliminating trade-offs.