5
lesson pretestMultiple Choice

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Question 5 • Economics

Which of these best illustrates the importance of addressing the three questions of economics?

Answer
A
People’s desires and needs are always changing.
B
Businesses need to limit production.
C
Traditional methods of production are outdated.
D
Businesses need to use limited resources wisely.

Explanation

The three basic economic questions—what to produce, how to produce it, and who receives it—arise because resources are limited while wants are plentiful. Addressing them helps society decide how to use scarce resources effectively. Therefore, “Businesses need to use limited resources wisely” best illustrates their importance.

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