Question : The basic economic problem confronting all societies is how to allocate scarce resources between
Option 1: Alternative uses
Option 2: Rich and poor
Option 3: Agricultural sector and industrial sector
Option 4: None of the above
Correct Answer: Alternative uses
Solution :
The correct answer is (a) Alternative uses.
The fundamental economic problem arises due to the scarcity of resources relative to unlimited wants and needs. As a result, societies must make choices about how to allocate these limited resources among various alternative uses. This involves deciding what goods and services to produce, how to produce them, and for whom to produce them.
While the distribution of resources between rich and poor or between the agricultural and industrial sectors can be significant issues within an economy, they are not the central economic problem that all societies face. The central economic problem revolves around the allocation of scarce resources among alternative uses, considering factors such as efficiency, opportunity costs, and societal priorities.
