Which of the following statements best reflects the basic principles of economics?

• A. People face trade-offs because resources are scarce.
• B. Individuals can satisfy all their wants without making choices.
• C. Government intervention is never necessary in any economy.
• D. Markets always guarantee equal distribution of wealth.

Answer: (A)

Verified step by step guidance

1. Understand the fundamental problem economics addresses: scarcity. Resources are limited, but human wants are unlimited, which means choices must be made.
2. Recognize that because resources are scarce, individuals and societies face trade-offs, meaning choosing more of one thing usually means having less of another.
3. Evaluate each statement in the problem by comparing it to the core economic principle of scarcity and trade-offs.
4. Identify that the statement 'People face trade-offs because resources are scarce' directly reflects the basic economic principle.
5. Note why the other statements are incorrect: individuals cannot satisfy all wants without choices, government intervention can be necessary, and markets do not always ensure equal wealth distribution.