Which of the following best describes the basic choices faced by all societies due to scarcity?

• A. What goods to consume, how to save money, and when to invest
• B. How to maximize profits, minimize costs, and increase exports
• C. What to produce, how to produce, and for whom to produce
• D. How to eliminate scarcity, increase resources, and reduce opportunity cost

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of scarcity in economics. Scarcity means that resources are limited while human wants are unlimited, forcing societies to make choices about resource allocation.
2. Step 2: Recognize that due to scarcity, societies must decide what goods and services to produce. This involves choosing which products will satisfy the most urgent needs or wants.
3. Step 3: Identify that societies must also decide how to produce these goods and services. This includes selecting the production methods and resource combinations that are most efficient or appropriate.
4. Step 4: Understand that societies must determine for whom the goods and services are produced. This relates to the distribution of output among different individuals or groups within the society.
5. Step 5: Conclude that the basic economic problem faced by all societies due to scarcity is summarized by the three fundamental questions: What to produce, how to produce, and for whom to produce.