There is need of economic study, because
Options
AThe resources are limited
BThe wants are unlimited
CThe resources are unlimited
DBoth a and b
For any discrepancies in this question, email contact@cadada.in
Introduction to Business EconomicsMODULEQuestion 639 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 economic problem, meaning that human wants for goods, services, and resources exceed what is available.
• Option (A) states that "The resources are limited." This is a crucial aspect of scarcity. Resources like land, labor, capital, and entrepreneurship are finite. There isn't an endless supply of them.
• Option (B) states that "The wants are unlimited." Human desires and needs are constantly evolving and expanding. Once one want is satisfied, another often emerges. This insatiable nature of wants is another key component of scarcity.
• Because resources are limited (A) and wants are unlimited (B), societies must make choices about how to allocate their scarce resources to satisfy as many wants as possible. This decision-making process, involving trade-offs and opportunity costs, is precisely what economics studies.
• Therefore, both the limited nature of resources and the unlimited nature of wants together create the problem of scarcity, which necessitates the study of economics.
• 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 to manage their allocation.
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.
Related Comparison Tables
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