Why Does the Problem of Scarcity Exist

question 105

Multiple Choice

Why does the problem of scarcity exist?

• A) because resources are limited relative to wants
• B) because governments fail to intervene in the market place
• C) because resources are unlimited relative to wants
• D) because the world has many poor people

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Definitions:

Solvency-Based Measure

An assessment of a company's ability to meet its long-term financial commitments and continue its operations into the foreseeable future.

Operating Activities

Activities that relate to the core business operations of a company, including revenue and expense transactions that affect the net income.

Net Capital Expenditures

The amount spent on acquiring or upgrading physical assets, less any sales of fixed assets, during a given period.

Free Cash Flow

The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets, available for paying dividends or debt.