Which of the Following Statements Regarding the Basic Economic Problem

question 154

Multiple Choice

Which of the following statements regarding the basic economic problem of scarcity is correct?

• A) The problem will exist only in countries that are not highly industrialized.
• B) The problem will disappear as production increases.
• C) The problem will disappear as technology improves.
• D) The problem will exist as long as resources are available in limited amounts.
• E) The problem will disappear as a person's income falls.

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Definitions:

Opportunity Cost

The benefit foregone by using an asset in a particular way. Usually the income or benefit it would produce in its next best use.

Cash Outflow

Money going out of a business or individual's account, typically to pay for expenses, investments, or acquisitions.

Net Working Capital

Net working capital refers to the difference between a company's current assets and its current liabilities.

Overhead Expenses

Ongoing business costs not directly tied to creating a product or service but necessary for running the business, such as rent, utilities, and administrative expenses.