Consider the following statements:
(A) There has to be some compatibility between what people in a society collectively want to have and what they produce.
(B) The resources of a society are scarce in comparison to what the society is able to produce.
(C) Any allocation of the resources of a society results in the production of a particular combination of goods and services.
(D) The scarce resources of a society have to be allocated in keeping with the likes and dislikes of the government.
Which of the above statements are correct?
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) and (C) only
A society must produce what its people want, with resources that are scarce compared with their wants.
(A) There has to be some compatibility between what people in a society collectively want to have and what they produce. — Correct. What is produced must match what people want.
(B) The resources of a society are scarce in comparison to what the society is able to produce. — Incorrect. Resources are scarce in comparison to what people want to have. What a society can produce depends on those very resources.
(C) Any allocation of the resources of a society results in the production of a particular combination of goods and services. — Correct. Each way of using the resources gives one particular mix of goods and services.
(D) The scarce resources of a society have to be allocated in keeping with the likes and dislikes of the government. — Incorrect. They are allocated in keeping with the likes and dislikes of the people of the society.
NCERT (2026-27): “1.1 A Simple Economy … Needless to say that there has to be some compatibility between what people in society collectively want to have and what they produce. For example, the total amount of corn produced by family farm along with other farming units in a society must match the total amount of corn that people in the society collectively want to consume. …” “… Just as the resources of an individual are scarce, the resources of the society are also scarce in comparison to what the people in the society might collectively want to have. The scarce resources of the society have to be allocated properly in the production of different goods and services in keeping with the likes and dislikes of the people of the society.” “Any allocation of resources of the society would result in the production of a particular combination of different goods and services. The goods and services thus produced will have to be distributed among the individuals of the society. The allocation of the limited resources and the distribution of the final mix of goods and services are two of the basic economic problems faced by the society.” |