In economics, which term best describes a situation where there is a possibility of experiencing a loss, no change, or a gain?

• A. Scarcity
• B. Opportunity cost
• C. Risk
• D. Equilibrium

Answer: (C)

Verified step by step guidance

1. Understand the key terms provided in the problem: Scarcity, Opportunity cost, Risk, and Equilibrium.
2. Recall that Scarcity refers to the limited availability of resources relative to wants, which is a fundamental economic problem but does not directly describe the possibility of loss or gain.
3. Recognize that Opportunity cost is the value of the next best alternative foregone when making a decision, focusing on trade-offs rather than uncertainty about outcomes.
4. Identify that Risk involves situations where the outcomes are uncertain and can include the possibility of a loss, no change, or a gain, which matches the description given.
5. Note that Equilibrium refers to a state where supply equals demand in a market, which does not inherently involve uncertainty about outcomes.