Fewer available resources and a lower standard of living are characteristics of which type of economy?

• A. A perfectly competitive market
• B. An economy facing scarcity
• C. A command economy with abundant resources
• D. An economy with unlimited resources

Answer: (B)

Verified step by step guidance

1. Understand the concept of scarcity in economics: Scarcity refers to the fundamental economic problem of having limited resources to meet unlimited wants and needs.
2. Recognize that an economy facing scarcity has fewer available resources, which limits production and consumption possibilities, often leading to a lower standard of living.
3. Compare this with other types of economies: a perfectly competitive market is a market structure, not directly related to resource availability; a command economy refers to how resources are allocated, not their abundance; and an economy with unlimited resources is a theoretical concept that does not exist in reality.
4. Identify that the key characteristics of fewer available resources and a lower standard of living align with the concept of an economy facing scarcity.
5. Conclude that the correct answer is 'An economy facing scarcity' because scarcity directly explains the limitations in resources and the resulting lower standard of living.