The Fundamental Economic Problem Quiz

The fundamental economic problem is the scarcity of resources relative to unlimited wants.

Needs are things that are necessary for survival like food, shelter and clothing while wants are things that are desired but not necessary for survival.

They have to make choices due to the scarcity of resources and the need to allocate them efficiently between competing uses.

<p>Examples of wants mentioned in the text include television, cars, and trips to the cinema. They are sometimes called luxuries because they are not essential for survival, and may not be prioritized by everyone on their scale of preference.</p> Signup and view all the answers

<p>Factors that influence an individual's scale of preference include culture, upbringing, and life experiences.</p> Signup and view all the answers

<p>Scales of preference vary widely between individuals because everyone has a unique set of influences that shape their likes and dislikes, including culture, upbringing, and life experiences.</p> Signup and view all the answers

<p>Their wants may change from a small car with two doors to a large, family car with five doors. They may also want different types of furniture, appliances, or clothing to accommodate their family's needs.</p> Signup and view all the answers

<p>Some wants may develop and expand when individuals see others enjoying particular goods and services and so desire to have those goods as well.</p> Signup and view all the answers

<p>Society is faced with the fundamental economic problem of limited resources and unlimited wants, which means that even though businesses may produce more goods and services efficiently, people will always have more wants and desires than can be fulfilled with the available resources.</p> Signup and view all the answers