O Levels Economics (2281)•2281/11/M/J/18

Explanation
Scarcity Drives the Core Economic Problem
Steps:
- Identify the fundamental issue in economics: all societies face choices due to resource constraints.
- Recall the definition of the economic problem: it arises from conflicting human desires and available means.
- Evaluate choices against this: the root cause must apply universally to all economies.
- Select the option that matches the classic explanation of scarcity.
Why D is correct:
- Economics defines the central problem as scarcity—unlimited human wants exceed finite resources, forcing allocation decisions (per Lionel Robbins' definition).
Why the others are wrong:
- A: Climate change is an environmental issue, not the universal economic cause.
- B: Unemployment is a symptom of poor resource use, not the origin of the problem.
- C: Income inequality affects distribution but stems from scarcity, not causing it.
Final answer: D
Topic: The nature of the economic problem
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