📚 Learning Guide
Resource Allocation and Scarcity
medium

In a market experiencing a failure in resource allocation, which of the following is most likely to occur?

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Learning Path
Learning Path

Question & Answer
1
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2
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3
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4
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Choose the Best Answer

A

Efficient distribution of goods and services

B

Excess supply of certain goods

C

Perfect competition among firms

D

Optimal use of all available resources

Understanding the Answer

Let's break down why this is correct

Answer

In a market where resource allocation is failing, it means that goods and services are not being distributed efficiently or fairly. This can lead to some people having too much of a product while others have too little, creating a situation of scarcity for certain items. For example, if a town only produces a limited amount of bread but the demand is high, some people may struggle to get enough bread for their needs, while others may hoard it. This misallocation can cause frustration and inequality among the community, as not everyone has access to the resources they need. Therefore, addressing these failures is crucial for ensuring that resources are used wisely and everyone has a fair chance to obtain what they need.

Detailed Explanation

When resources are not used well, some goods can be made too much. Other options are incorrect because Some might think that a failure means goods are spread out well; People might believe that competition means everything is perfect.

Key Concepts

resource allocation
market failure.
Topic

Resource Allocation and Scarcity

Difficulty

medium level question

Cognitive Level

understand

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