The three questions of economics best help in making decisions about:

• A. how to allocate scarce resources
• B. how to increase population growth
• C. how to eliminate all opportunity costs
• D. how to maximize government revenue

Answer: (A)

Verified step by step guidance

1. Understand that the three fundamental questions of economics are: What to produce? How to produce? For whom to produce? These questions arise because resources are scarce and choices must be made.
2. Recognize that these questions help in deciding how to allocate scarce resources efficiently to satisfy the needs and wants of society.
3. Eliminate options that do not directly relate to resource allocation, such as increasing population growth or maximizing government revenue, since these are outcomes or policies rather than fundamental economic questions.
4. Understand that opportunity costs cannot be eliminated because scarcity always forces trade-offs; instead, economics helps in managing these costs through allocation decisions.
5. Conclude that the primary purpose of the three economic questions is to guide decision-making on how to allocate scarce resources among competing uses.