Economic problem arise in all society because?

Step 1: Analyze the question The question asks for the root cause of the basic economic problem that every society faces, whether rich or poor.

Step 2: Explain the concept The fundamental economic problem is scarcity. Human wants are unlimited, but the resources used to satisfy them (land, labour, capital, entrepreneurship) are limited. Because of this, every society must make choices about:

• What to produce
• How to produce it
• For whom to produce it

Economists use the term scarcity for the limited supply of resources relative to wants. Choice then leads to scale of preference and opportunity cost.

Step 3: Evaluate the options

• A. Resources are mismanaged by leaders: Mismanagement can make things worse, but even perfectly managed economies face scarcity. ❌
• B. There is no proper planning: Planning does not remove scarcity. Planned economies still face economic problems. ❌
• C. Resources are not in adequate supply: This describes scarcity, the root cause of economic problems in all societies. ✅
• D. The services of economists are not employed: Economists help in analysis and policy, but they do not create or remove scarcity. ❌

Step 4: Answer The correct answer is C. Economic problems arise because resources are limited (scarce) relative to the unlimited wants of people.

Step 5: Exam tip Remember the chain: Unlimited wants + Limited resources → Scarcity → Choice → Opportunity cost. When you see "why economic problems exist," think scarcity, and look for the option that talks about limited or inadequate resources.