Multiple Choice
Which situation best describes an opportunity cost?
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0. Basic Principles of Economics
Scarcity and Choice
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Which of the following forces individuals and societies to make choices?
A
Unlimited resources
B
Scarcity
C
Perfect information
D
Equilibrium
Verified step by step guidance1
Understand the concept of scarcity in microeconomics: Scarcity refers to the fundamental economic problem that resources are limited while human wants are unlimited.
Recognize that because resources (such as time, money, labor, and raw materials) are limited, individuals and societies cannot have everything they desire.
Identify that this limitation forces individuals and societies to make choices about how to allocate their scarce resources efficiently.
Contrast scarcity with other options: Unlimited resources would mean no need to make choices, perfect information relates to decision-making quality, and equilibrium is a market condition, not a cause of choice.
Conclude that scarcity is the key force that compels individuals and societies to prioritize and make decisions about resource use.
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