Which of the following correctly lists the basic needs of consumers that should be met according to economic theory?

• A. Luxury goods, entertainment, and travel
• B. Stocks, bonds, and real estate
• C. Automobiles, electronics, and jewelry
• D. Food, shelter, and clothing

Answer: (D)

Verified step by step guidance

1. Understand that economic theory often focuses on the concept of 'basic needs' which are essential for survival and well-being.
2. Identify that basic needs typically include goods and services necessary for maintaining life and health, such as food, shelter, and clothing.
3. Recognize that luxury goods, entertainment, travel, stocks, bonds, real estate, automobiles, electronics, and jewelry are considered non-essential or discretionary items rather than basic needs.
4. Recall that consumer demand theory distinguishes between needs (essential) and wants (non-essential), with basic needs being the foundation for consumer choices.
5. Conclude that the correct list of basic needs according to economic theory is 'Food, shelter, and clothing' because these satisfy fundamental human requirements.