Scarcity forces economic choices

Steps:

• Recognize the basic economic problem as scarcity: unlimited wants versus limited resources.
• Analyze the statement: need for new oil supplies to meet demand conflicts with environmental limits on exploration.
• Identify the core issue: oil availability is finite, requiring trade-offs between production and preservation.
• Match to options: the conflict exemplifies resource limitation, not just market mechanics.

Why A is correct:

• Scarcity, the basic economic problem, arises because resources like oil are limited relative to wants, forcing choices as defined in economics.

Why the others are wrong:

• B: Expense reflects scarcity's effects but isn't the fundamental problem itself.
• C: Demand and supply describe pricing but overlook the root scarcity driving choices.
• D: External costs highlight market failures, not the core issue of limited resources.

Final answer: A