Scarcity of resources occurs due to:
Options
AHigh demand of resources
BAbsence of Substitutes
CMismanagement and inequality
DAll of these
For any discrepancies in this question, email contact@cadada.in
Introduction to Business EconomicsMTP Apr 21Question 679 of 209
All Questions Correct Answer
✅ Option d — All of these
All Options:
- AHigh demand of resources
- BAbsence of Substitutes
- CMismanagement and inequality
- DAll of these
Detailed Solution & Explanation
• Scarcity is a fundamental economic problem where human wants for goods, services, and resources exceed what is available. This means that resources are limited, but human desires are virtually unlimited.
• Option (A) "High demand of resources" contributes to scarcity. If demand for a resource is very high, and its supply is limited, it becomes scarce. For example, if everyone wants a specific rare metal, its scarcity increases.
• Option (B) "Absence of Substitutes" also exacerbates scarcity. If there are no alternative resources or ways to achieve a desired outcome, then the limited availability of the primary resource becomes a more pressing issue. For instance, if there's only one source for a critical component and no substitutes, its scarcity is more impactful.
• Option (C) "Mismanagement and inequality" significantly contribute to scarcity. Even if resources exist, poor management (e.g., waste, inefficient allocation) or unequal distribution (where some have too much and others too little) can lead to a perceived or actual scarcity for a large portion of the population. Think of food waste in some regions while others starve.
• Therefore, all these factors collectively contribute to the problem of scarcity. Scarcity isn't usually caused by a single factor but by a combination of high demand, lack of alternatives, and inefficient or unequal distribution. This aligns with the core economic principle that resources are finite relative to infinite 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 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