How does the study of economics help individuals make better choices?

• A. By providing unlimited resources for consumption
• B. By teaching how to allocate limited resources efficiently among competing uses
• C. By ensuring that all wants and needs can be satisfied without constraints
• D. By eliminating the need to make trade-offs between different options

Answer: (B)

Verified step by step guidance

1. Understand the fundamental problem economics addresses: scarcity, which means resources are limited while human wants are unlimited.
2. Recognize that because resources are limited, individuals must make choices about how to allocate these resources effectively.
3. Learn that economics provides tools and frameworks to analyze how to allocate limited resources efficiently among competing uses to maximize satisfaction or benefit.
4. Realize that economics teaches the concept of trade-offs, where choosing more of one thing means having less of another, helping individuals weigh costs and benefits.
5. Conclude that by studying economics, individuals become better decision-makers because they understand how to prioritize and allocate scarce resources to meet their most important needs and wants.