The overriding reason as to why households and societies face many decisions is that

The overriding reason as to why households and societies face many decisions is that

a. resources are scarce.

b. goods and services are not scarce.

c. incomes fluctuate with business cycles.

d. people, by nature, tend to disagree.

Answer: a. resources are scarce.

Lack of resources is the core issue which faces every person, family, and country in the financial world. It means that there are constraints, namely land, labour, capital, and entrepreneurs; on the other hand, people’s wants are almost indeed endless. In this respect, as well as in the case of the three previous plans, even in the wealthiest of countries around the world, there is never enough capital supply in order to meet the entirety of one’s discretionary wants. This scarcity compels us to exercise choices on what to produce and how to produce it, whether there is a high demand for goods and services. For example, purchasing a car for use in the household or putting part of the income for retirement, between providing more school or investing in health, are some examples of between choices. These compromises do not stem from disputes or changes in individuals’ income; they are an inherent aspect of resource constraint.