The basic idea of choice in economics arises because:

• A. There is no opportunity cost in decision-making.
• B. All goods and services are free.
• C. Resources are limited while wants are unlimited.
• D. Production possibilities are infinite.

Answer: (C)

Verified step by step guidance

1. Understand the concept of scarcity in economics: it means that resources (such as time, money, labor, and raw materials) are limited, but human wants and needs are unlimited.
2. Recognize that because resources are limited, individuals and societies must make choices about how to allocate these resources efficiently.
3. Learn that opportunity cost arises from these choices, representing the value of the next best alternative foregone when a decision is made.
4. Realize that the statement 'Resources are limited while wants are unlimited' captures the fundamental reason why economic choice and trade-offs exist.
5. Conclude that the other options (no opportunity cost, all goods free, infinite production possibilities) contradict basic economic principles and do not explain the need for choice.