How can limited resources benefit the problem-solving capability in an organization?

• A. They eliminate the need for prioritization among competing projects.
• B. They encourage innovation by forcing individuals to find creative solutions.
• C. They reduce the importance of opportunity cost in decision-making.
• D. They allow unlimited options for resource allocation.

Answer: (B)

Verified step by step guidance

1. Understand the concept of limited resources in microeconomics: resources such as time, money, labor, and materials are scarce and cannot satisfy all wants and needs simultaneously.
2. Recognize that scarcity forces organizations to make choices about how to allocate their limited resources most effectively, which involves prioritization among competing projects or tasks.
3. Analyze how this scarcity can stimulate innovation: when resources are limited, individuals and organizations are motivated to find creative and efficient solutions to problems to maximize the use of what they have.
4. Contrast this with the incorrect options: limited resources do not eliminate the need for prioritization; instead, they make prioritization essential. They also increase the importance of opportunity cost, as choosing one option means forgoing another.
5. Conclude that limited resources benefit problem-solving by encouraging innovation and creativity, as organizations must think outside the box to overcome constraints.