Question

Question 4 According to neoclassical economists, the central economic problem is

a. unchecked population growth.

b. the distribution of income.

c. rapid technological change

d. choice due to the existence of scarcity

What is the attitude of neoclassical economists toward scarcity?

a. scarcity is a hoax perpetuated by radical environmentalists.

b. scarcity is the result of speculators trying to drive up prices.

c. scarcity results from the unlimited desires of people.

d. scarcity can be solved by the operation of the free market.

Answer 1

4. According to neoclassical economists, the central economic problem is choice due to the existence of scarcity. The social resources are scarce but their uses are unlimited. Therefore, decisions should be made in a manner that these scarce resources are used efficiently and optimal allocation of these resources should be made. Therefore, the correct option is d.

The attitude of neoclassical economists towards scarcity is: scarcity results from unlimited desires of people. Scarcity is the gap between the desires of people and productive capacity. The desires of people are unlimited but the availibility of resources are limited. Therefore, the correct option is c.