Which of the following is a basic characteristic of all economic systems?

• A. Scarcity of resources
• B. Perfect information for all participants
• C. Unlimited production capacity
• D. Absence of opportunity cost

Answer: (A)

Verified step by step guidance

1. Understand the concept of an economic system: it is a method by which societies organize the production, distribution, and consumption of goods and services.
2. Recall that a fundamental problem all economic systems face is scarcity, meaning that resources are limited while human wants are unlimited.
3. Recognize that scarcity forces societies to make choices about how to allocate resources efficiently, which leads to the concept of opportunity cost.
4. Evaluate each option: 'Scarcity of resources' aligns with the fundamental economic problem, while 'Perfect information', 'Unlimited production capacity', and 'Absence of opportunity cost' are idealized or unrealistic conditions not characteristic of all economic systems.
5. Conclude that the basic characteristic common to all economic systems is the scarcity of resources, as it underpins the need for economic decision-making.