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 20Question 703 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 these wants are limited or scarce. This fundamental conflict is the core of economics.
• Let's break down why each option contributes to this problem:
• (A) Scarcity of Resources: This is the most fundamental 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. If resources were unlimited, there would be no need to make choices, and thus no economic problem.
• (B) Unlimited Wants: Human desires for goods and services are insatiable and ever-growing. As soon as one want is satisfied, another emerges. This endless desire, coupled with limited resources, creates the need for economic decision-making.
• (C) Alternative Uses: Most resources have multiple potential uses. For example, a piece of land can be used for farming, building a factory, or constructing houses. Because resources are scarce, choosing one use means sacrificing another. This concept of opportunity cost is central to the economic problem.
• Since the economic problem is a result of the interplay of all these factors – scarce resources, unlimited wants, and the alternative uses of those resources – the correct answer is (D) All of the above. Each element is a necessary condition for the economic problem to exist. If any one of them were absent, the economic problem as we know it would not arise.
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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