Question:
The central problem of an economy arises mainly because:
The central problem of an economy arises mainly because:
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Unlimited Wants + Limited Resources = Central Problem of Economics.
Updated On: Jun 3, 2026
- Human wants are limited
- Resources are unlimited
- Resources are scarce relative to wants
- Government controls all resources
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The Correct Option is C
Solution and Explanation
Concept:
Economics studies how scarce resources are allocated among alternative uses.
Step 1: Understanding scarcity.
Human wants are unlimited, but resources such as land, labour, and capital are limited.
Step 2: Implication of scarcity.
Because resources are scarce:
Step 3: Evaluating options.
(A) Incorrect because wants are unlimited.
(B) Incorrect because resources are scarce.
(C) Correct statement explaining economic problem.
(D) Government control is unrelated to the basic problem.
Step 4: Final conclusion.
Thus: \[ \boxed{\text{(C) Resources are scarce relative to wants}} \]
Step 1: Understanding scarcity.
Human wants are unlimited, but resources such as land, labour, and capital are limited.
Step 2: Implication of scarcity.
Because resources are scarce:
- Choices must be made.
- Priorities are necessary.
- Opportunity cost arises.
Step 3: Evaluating options.
(A) Incorrect because wants are unlimited.
(B) Incorrect because resources are scarce.
(C) Correct statement explaining economic problem.
(D) Government control is unrelated to the basic problem.
Step 4: Final conclusion.
Thus: \[ \boxed{\text{(C) Resources are scarce relative to wants}} \]
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