What is an economy experiencing when a society cannot produce all the goods and services people wish to have
A)scarcity
B)misallocation
C)externalities
D)market failure

Question

Quizplus · Accepted Answer

When a society cannot produce all the goods and services people wish to have, it is experiencing scarcity, which is a fundamental economic problem. This means that resources are limited compared to unlimited human wants and needs, which creates the need for making choices and trade-offs. Scarce resources include natural resources, labor, capital, and entrepreneurship, and their allocation is determined by supply and demand in the marketplace. Therefore, scarcity affects the decisions made by consumers, producers, and policymakers, and it is the reason why economics is concerned with how societies allocate resources efficiently.

What Is an Economy Experiencing When a Society Cannot Produce