Chapter 7, Problem 3AA

To determine

To choose: The term that best completes the given sentence.

Answer to Problem 3AA

The term that best completes the given sentence is concept.

Explanation of Solution

In economics, choice is very important, since it is the primary reason why we study economics. Since not everything is free and people always find scarce resources. So, economics shows how people have to make choices and trade-offs, give up on something else.

All societies are faced with the economic question, which is how to make maximum use of limited or scarce resources. The economic dilemma persists because, while people's needs and wishes are infinite, there are restricted resources available to meet needs and wants. The question of choice involves the distribution of various finite resources with alternate uses used to generate specific goods and services in the economy in order to meet limitless human needs.

Economics Concept Introduction

Introduction:   The distribution of finite resources within an economy decides the form of economic system. Different forms of economic structures exist that are traditional economy, open market and a mixed economy. An economic system refers to the system of generating goods and services, allocation of resources and distribution of goods and services within a given society or geographical region.