Economic problem occurs when

Step 1: Analyze the question The question asks when an economic problem occurs. In Economics, you should connect this directly to the central idea of the subject: scarcity.

Step 2: Explain the concept The basic economic problem is scarcity. Human wants are unlimited, but the resources available to satisfy them (land, labour, capital, and entrepreneurship) are limited. Because of this:

• People must choose what to produce and consume
• Choosing one thing means giving up another (this is opportunity cost)
• Society must decide what, how, and for whom to produce

So an economic problem exists whenever resources are scarce relative to the demand (wants) for them.

Step 3: Evaluate each option

• A. There is scarcity relative to demand: Correct. This is the definition of the economic problem: limited resources against unlimited wants.
• B. All raw materials are imported: Wrong. Importing raw materials is a trade matter, not the fundamental economic problem.
• C. Many people are out of work: Wrong. This is unemployment, which is one economic issue but not the economic problem.
• D. There are no buyers for our goods: Wrong. This describes a lack of demand, which is the opposite of scarcity.

Step 4: Answer The correct option is A.

Step 5: Exam tip Whenever you see "economic problem" in JAMB Economics, think SCARCITY → CHOICE → OPPORTUNITY COST. Remember: "Wants are unlimited, resources are limited." Any option that mentions scarcity relative to wants or demand is almost always the answer.