Which of the following is a cause of an economic problem?
Options
AScarcity of Resources
BUnlimited wants
CAlternative uses
DAll of the above
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Introduction to Business EconomicsMTP Mar 18Question 702 of 209
All Questions Correct Answer
✅ Option d — All of the above
All Options:
- AScarcity of Resources
- BUnlimited wants
- CAlternative uses
- DAll of the above
Detailed Solution & Explanation
• An economic problem arises because human wants are virtually unlimited, but the resources available to satisfy those wants are limited or scarce. This fundamental conflict is at the heart of economics.
• Option (A) Scarcity of Resources is a primary cause. Resources like land, labor, capital, and entrepreneurship are finite. There isn't enough of everything to produce all the goods and services people desire. This scarcity forces societies to make choices.
• Option (B) Unlimited wants is another crucial cause. Human desires for goods and services are insatiable; as one want is satisfied, another emerges. This endless desire constantly puts pressure on limited resources.
• Option (C) Alternative uses refers to the fact that most resources can be used to produce more than one good or service. For example, a piece of land can be used to build a factory, grow crops, or develop housing. Because resources have alternative uses, a choice must be made about which use will best satisfy wants, given the scarcity. This choice involves an opportunity cost.
• Therefore, all three factors – scarcity of resources, unlimited wants, and alternative uses of resources – collectively contribute to the existence of an economic problem. They are interconnected and together necessitate the study of economics, which is about how societies allocate scarce resources to satisfy unlimited wants. Hence, 'All of the above' is the correct answer.
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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