Question

Which of the following is a central problem of every economy?

• A. Abundance of resources
• B. Scarcity of economic resources
• C. Poverty
• D. Moral and ethical values

Answer 1

Answer: (B)

Scarcity of economic resources

Central problem of an economy are:

a) What to produce?

The problem of choice related to the production of different goods.

b) How to produce?

The problem of choice related to the technique of production.

c) For whom to produce?

The problem of choice related to the distribution of output.

These problems are central to every economy . These are arises because:

a) resources are scarce in relation to unlimited wants, and

b) resources have alternative uses.