Introduction to Business EconomicsMODULEQuestion 635 of 209
All Questions

What implication(s) does resource scarcity have for the satisfaction of wants?

Options

ANot all wants can be satisfied.
BWe will never be faced with the need to make choices.
CWe must develop ways to decrease our individual wants.
DThe discovery of new natural resources is necessary to increase our ability to satisfy wants.
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Correct Answer

✅ Option a — Not all wants can be satisfied.

All Options:

  • ANot all wants can be satisfied.
  • BWe will never be faced with the need to make choices.
  • CWe must develop ways to decrease our individual wants.
  • DThe discovery of new natural resources is necessary to increase our ability to satisfy wants.

Detailed Solution & Explanation

• Resource scarcity is a fundamental concept in economics, meaning that the available resources (land, labor, capital, entrepreneurship) are finite, while human wants are virtually unlimited. • Because resources are limited and wants are unlimited, it's impossible to satisfy all wants simultaneously. This forces individuals, businesses, and governments to make choices about which wants to satisfy and which to leave unsatisfied. This directly leads to the core economic problem of scarcity. • Therefore, the most direct implication of resource scarcity is that not all wants can be satisfied. This is the essence of the economic problem. • Option (A) is correct because it accurately reflects this fundamental economic principle. Scarcity dictates that choices must be made, and some wants will inevitably go unfulfilled. • Option (B) is incorrect because scarcity *always* forces us to make choices. If resources were unlimited, there would be no need for choices. • Option (C) is incorrect because while decreasing individual wants might be a philosophical or personal approach, it's not the primary economic implication of scarcity. Economics deals with how societies allocate scarce resources to satisfy as many wants as possible, given their unlimited nature. • Option (D) is incorrect because while discovering new resources can *help* satisfy more wants, it doesn't negate the fundamental problem of scarcity. Even with new discoveries, wants tend to expand, and resources remain finite relative to those wants.

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

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