Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It ensures that resources are allocated equally among all individuals.
B
It creates incentives for individuals to find innovative solutions to manage limited resources.
C
It eliminates the need for decision-making in resource distribution.
D
It guarantees that all goods and services are available at zero cost.
Understanding the Answer
Let's break down why this is correct
Answer
Economic scarcity means that there are limited resources available to meet unlimited wants and needs. Because of this scarcity, people and businesses must make choices about how to use their resources effectively. For example, if a farmer has only a small amount of land, they must decide whether to grow corn or wheat, knowing that choosing one means they cannot grow the other. This decision affects how resources are allocated, as the farmer will choose the crop that they believe will bring the most profit or meet the demand. As a result, scarcity creates incentives for producers to innovate and find better ways to use their resources, which can lead to improvements in products and services that benefit everyone.
Detailed Explanation
Scarcity means there are not enough resources for everyone. Other options are incorrect because Some might think scarcity means everyone gets the same amount; It's a common belief that scarcity makes decisions easy.
Key Concepts
resource allocation
incentives
Topic
Understanding Economic Scarcity
Difficulty
medium level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.