Question 1
[Maximum number: 1]
What must follow when scarcity exists?
A
Consumers have to make choices.
B
Governments are unable to supply public goods.
C
Producers must be misallocating resources.
D
Workers must be earning low wages.
CAIE A-Level Economics 1.1.2 Economic choice
Practise why individuals, firms and governments must choose when scarce resources have alternative uses and competing wants.
How this is tested
- link scarcity to the need for consumers, firms or governments to make choices
- interpret welfare or budget data to choose the allocation with the highest benefit