ECONOMICS
SCARCITY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A A decision entails zero opportunity cost.
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B Resources are scarce.
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C Some resources are always unemployed.
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D Resources have no alternative uses.
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E Resources are not allocated efficiently.
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Detailed explanation-1: -With each decision we face trade offs-since something must be sacrificed or given up whenever a choice is made. Scarcity is the reason why we must make decisions; we have unlimited needs and wants but only limited time, money, and other resources. Resources spent on one activity cannot be spent doing something else.
Detailed explanation-2: -People face trade-offsEdit Examples include how students spend their time, how a family decides to spend its income, how the government spends revenue, and how regulations may protect the environment at a cost to firm owners. A special example of a trade-off is the trade-off between efficiency and equality.
Detailed explanation-3: -Scarcity implies that society must make trade-offs-that we must give up something to get more of another thing. For example, if I want to spend an hour sleeping, I cannot get it without giving up something else, such as an hour of studying.
Detailed explanation-4: -Which of the following is one reason why trade makes all parties better off? Because it permits all parties to acquire some items better suited to their tastes.