📚 Learning Guide
Impact of Limited Resources
easy

What is the primary cause of scarcity in an economy?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Unlimited human wants

B

Inefficient resource allocation

C

Government regulation

D

Technological advancements

Understanding the Answer

Let's break down why this is correct

Answer

The primary cause of scarcity in an economy is the limited nature of resources compared to the unlimited wants and needs of people. Resources such as land, labor, and capital are finite, meaning there is only a certain amount available for producing goods and services. For example, if a farmer has only a small piece of land, they can only grow a limited amount of crops, even though many people may want food. This imbalance between what is available and what is desired leads to scarcity, making it necessary for individuals and societies to make choices about how to use their resources wisely. Ultimately, scarcity forces us to prioritize our needs and find the best ways to fulfill them with what we have.

Detailed Explanation

People always want more things than what is available. Other options are incorrect because Some might think that wasting resources causes scarcity; It's a common belief that rules from the government create scarcity.

Key Concepts

Scarcity
Resource Allocation
Economic Decision-Making
Topic

Impact of Limited Resources

Difficulty

easy level question

Cognitive Level

understand

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