In the course of basic economic activities, every society has to face a scarcity of resources, and the scarcity of resources raises which of the following problem?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Choice.
Every society produces, exchanges and consumes goods, and in all three it meets the same difficulty: resources are scarce and have competing uses. It cannot have everything, so it must decide what to produce, how to produce and for whom to produce; this is the problem of choice that scarcity of resources raises.
Why the other options are incorrect
Option (1) Production. — Incorrect. Production is one of the basic economic activities themselves. Scarcity forces a choice about what and how much to produce; it does not create production.
Option (2) Consumption. — Incorrect. Consumption too is one of the basic activities in which scarcity is faced. The problem that scarcity raises is the choice between its competing uses.
Option (4) Exchange. — Incorrect. Exchange is the third basic activity. It is not the problem that scarcity gives rise to.
Note: A same/similar question was asked in CUET (UG) in the papers below.
| 2026 | 2025 | 2024 | 2023 | 2022 |
| 13-05 S2 | 28-05 S2* | – | – | – |
* A similar question.
NCERT (2025-26): “1.2 Central Problems of an Economy … Production, exchange and consumption of goods and services are among the basic economic activities of life. In the course of these basic economic activities, every society has to face scarcity of resources and it is the scarcity of resources that gives rise to the problem of choice. The scarce resources of an economy have competing usages. In other words, every society has to decide on how to use its scarce resources.…” |