Which of the following is not concerned with the problem of choice?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Excessive Income.
The problem of choice in economics arises because of the following three core reasons:
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Unlimited wants – Human wants are endless.
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Limited (scarce) resources – Resources to satisfy these wants are limited.
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Alternative uses of resources – The same resources can be used for different purposes.
Because of these, individuals and societies must make choices about how to allocate resources efficiently.