Question

Economic problem arises due to ______.

Options

• limited wants

• scarce means

• alternative uses

• Both scarce means and alternative uses

Answer 1

Economic problem arises due to scarce means and alternative uses.

Explanation:

The economic problem arises because of scarce means (resources) and their alternative uses. Human wants are unlimited, but resources to fulfill these wants are limited or scarce. Moreover, these scarce resources have multiple alternative uses, which forces choices to be made about how to allocate them optimally. Thus, scarcity of resources combined with their alternative uses is the root cause of economic problems. Limited wants alone do not cause economic problems; rather, the wants are unlimited. Hence, the economic problem arises due to scarce means and alternative uses of resources.