Introduction to Business EconomicsMODULEQuestion 620 of 209
All Questions

Economic goods are considered scarce resources because they

Options

Acannot be increased in quantity.
Bdo not exist in adequate quantity to satisfy the requirements of the society.
Care of primary importance in satisfying social requirements.
Dare limited to man made goods
For any discrepancies in this question, email contact@cadada.in

Correct Answer

✅ Option b — do not exist in adequate quantity to satisfy the requirements of the society.

All Options:

  • Acannot be increased in quantity.
  • Bdo not exist in adequate quantity to satisfy the requirements of the society.
  • Care of primary importance in satisfying social requirements.
  • Dare limited to man made goods

Detailed Solution & Explanation

• The core concept here is scarcity, a fundamental problem in economics. Scarcity means that human wants for goods, services, and resources exceed what is available. • Option (B) correctly defines why economic goods are considered scarce. They "do not exist in adequate quantity to satisfy the requirements of the society." This means that even if we could produce more, there still wouldn't be enough to satisfy everyone's desires at a zero price. This gap between unlimited wants and limited resources is the essence of scarcity. • Option (A) is incorrect because many economic goods *can* be increased in quantity (e.g., manufactured goods, agricultural products). The issue isn't the inability to increase quantity, but rather that even with increased production, the demand still outstrips the supply at a zero price, or that increasing quantity requires sacrificing other goods due to limited resources. • Option (D) is incorrect because scarcity applies to all economic goods, whether natural (like land or oil) or man-made (like cars or houses). The origin of the good doesn't determine its scarcity; its availability relative to demand does.

About This Chapter: Introduction to Business Economics

Paper

Paper 4: Business Economics

Weightage

5%

Key Topics

Meaning, Scope, Price Mechanism

This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.

View Official ICAI Syllabus

Exam Strategy Tip

Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.

Related Comparison Tables

Microeconomics vs Macroeconomics: The Complete CA Foundation GuidePositive vs Normative Economics: Fact vs Opinion

More Questions from Introduction to Business Economics

A study of how increases in the corporate income tax rate will affect the nation unemployment rate is an example of

In a ______ the producer is free to set up any type of firms produce goods and services of his choice.

In the beginning the word economics was

In Economics, we use the term scarcity to mean;

In a free market economy, allocation of resources is determined by

If there is no central planning authority to make the fundamental economic decisions and thus to allocate productive resources, how can then free enterprise or capitalist economy solve its central problems?

Ready to Master Introduction to Business Economics?

Practice all 209 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free