Which of the following is correct about the economic decisions consumers,firms,and the government have to make?
A)Governments may face the problem of shortages but not scarcity in making economic decisions.
B)Only individuals face scarcity; firms and the government do not.
C)Firms and the government face scarcity,individuals only face shortages.
D)Each faces the problem of scarcity which necessitates trade-offs in making economic decisions.

Question

Quizplus · Accepted Answer

Scarcity is the fundamental problem of economics, and it affects all three types of economic decision-makers: consumers, firms, and government. Scarcity means that there are limited resources to satisfy unlimited wants and needs. As a result, every economic decision involves trade-offs, as the decision-maker must choose what to prioritize and what to forego. Therefore, D is the correct answer. A, B, and C are all incorrect because they do not acknowledge the universality of scarcity as a fundamental concept in economics.

Which of the Following Is Correct About the Economic Decisions