Question

The problem of scarcity:

a) is solved by promoting economic growth.
b) exists because resources are limited relative to wants.
c) is caused by artificially high prices.
d) has been "cooked up" by disenchanted anticapitalists.

Answer 1

The correct answer is option b.

Step-by-step explanation:

The problem of scarcity of resources is the basic problem in the study of economics. This problem exists because the resources are limited and have alternative uses. These resources are used to satisfy unlimited wants and needs.

So we need to determine the efficient allocation of these scarce resources such that we are able to get maximum satisfaction or utility from them.

Because of this scarcity problem, every economic decision involves some trade-off.