Becoming informed about economics helps a person understand the:

• A. precise outcomes of all government policies
• B. personal preferences of all consumers
• C. exact predictions of future stock market prices
• D. ways individuals and societies allocate scarce resources

Answer: (D)

Verified step by step guidance

1. Understand that economics is the study of how individuals and societies make choices when faced with scarcity, meaning limited resources and unlimited wants.
2. Recognize that economics does not provide precise outcomes for government policies because these outcomes depend on many unpredictable factors and human behavior.
3. Know that economics does not focus on personal preferences of all consumers individually, but rather on general patterns and behaviors in markets.
4. Acknowledge that economics cannot exactly predict future stock market prices due to the complexity and randomness involved.
5. Conclude that the main purpose of economics is to explain the ways individuals and societies allocate scarce resources to satisfy their needs and wants.