BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The pre-independent Indian economy, where most people were farmers.
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A mythical economy where everybody is a billionaire.
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Any economy where income is distributed equally among its people.
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None of the above.
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Detailed explanation-1: -Answer. option D is correct answer because scarcity causes choice and choice implies the decision making relates to usage of limited or rare resources in an economy so if there is no scarcity means there is no choices and no economy.
Detailed explanation-2: -In theory, if there was no scarcity the price of everything would be free, so there would be no necessity for supply and demand. There would be no need for government intervention to redistribute scarce resources. One could think of macroeconomic problems like economic growth and unemployment.
Detailed explanation-3: -In economics scarcity, or paucity, occurs when there is a disparity between the limited availability of a given resource and the demand for that resource. In theory, human wants can be infinite, but there is a finite amount of material resources, meaning there will always be some degree of scarcity.
Detailed explanation-4: -Basics of Scarcity Hypothetically speaking, if every resource on earth was abundant, there would be no need for economists. Decisions on resource allocation would not be necessary and tradeoffs would be redundant. Unfortunately, the real world does not work in such a way.
Detailed explanation-5: -If there is no scarcity of resources, the concept of supply and demand would be meaningless and the prices for all the commodities would be free. Economics would no longer be a useful subject because economics studies the scarcity of resources when the wants of an individual are unlimited.