There is need of economic study, because
Options
AThe resources are limited
BThe wants are unlimited
CThe resources are unlimited
DBoth a and b
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Introduction to Business EconomicsMTP Oct 20Question 638 of 209
All Questions Correct Answer
✅ Option d — Both a and b
All Options:
- AThe resources are limited
- BThe wants are unlimited
- CThe resources are unlimited
- DBoth a and b
Detailed Solution & Explanation
• The need for economic study arises from a fundamental problem faced by all societies: scarcity. Scarcity is the core concept in economics.
• Scarcity exists because human wants are virtually unlimited. People always desire more goods, services, and resources to satisfy their needs and desires. This is why option (B) "The wants are unlimited" is a correct part of the answer.
• At the same time, the resources available to satisfy these unlimited wants are limited or scarce. These resources include land, labor, capital, and entrepreneurship. This is why option (A) "The resources are limited" is also a correct part of the answer.
• Economics, therefore, is the study of how societies allocate their scarce resources to satisfy their unlimited wants. It deals with choices that must be made due to this fundamental imbalance.
• Option (C) "The resources are unlimited" is incorrect because if resources were unlimited, there would be no scarcity, and thus no need for economic study or making choices about resource allocation.
• Since both the limitation of resources and the unlimited nature of wants contribute to the problem of scarcity, which necessitates economic study, the correct answer is (D) Both a and b.
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 SyllabusExam 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.
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