Concepts Of Wants, Scarcity, Scale Of Preference, Choice And Opportunity Cost - SS1 Economics Past Questions and Answers - page 1

The best definition of wants is: * **A.** The desires or needs of individuals for goods and services that can satisfy their needs or make them happier. Wants represent the goods and services people desire, which provide satisfaction or pleasure. The other options are not definitions of wants: * **B.** Describes resources, not wants. * **C.** Describes a prioritized list, but doesn't define wants themselves. * **D.** Defines the act of choosing, not the wants themselves.

Scarcity is a fundamental concept in economics. It refers to the basic economic problem of having unlimited human wants and needs in a world of limited resources. * **Option A** is incorrect because it describes the opposite of scarcity – unlimited resources. * **Option B** correctly defines scarcity as the condition where resources are limited compared to the wants and needs. * **Option C** describes a "want list," not scarcity. * **Option D** describes "choice" or "opportunity cost", which is related to scarcity, but not the definition itself.

The scale of preference is best defined as the list of wants or needs arranged in order of priority. This is because individuals have limited resources and must decide which wants are more important to satisfy first.

Choice, in the context of economics, refers to the act of selecting one option from a set of alternatives. This is because individuals and societies face scarcity, and they must make decisions about how to allocate limited resources to satisfy their wants and needs.

Scarcity is a fundamental problem in economics because it creates the need for individuals to make choices about how to allocate their resources to satisfy their most important wants.

Opportunity cost is important in economics because it helps individuals to make better decisions by comparing the benefits and costs of different options.