acc.3-4marks

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1 how is choice a core parameter in the study of economics?

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2 how 3 central problems arises?

Solution 1

We know, that economics deal with the human behaviour in the face of wants and resources to satisfy these wants. Now, a unique feature of human behaviour is the never-ending or unlimited wants. In comparison to this, the resources to satisfy these wants are limited. As these resources can be used for the production of various goods and services, we can say that these resources have alternative uses. But, if the resources are allocated to the production of one good, then the economy will have to forgo the production of another good. In this way, the economy has to trade off between the production of selected goods. Therefore, in order to allocate these resources in the best possible manner, there arises the problem of choice. This problem of choice (due to the scarcity of resources) becomes the core parameter in the study of economics as it gives rise to the central problems of an economy.

Solution 2

The answer to the concerned question has been explicitly covered in our study material. You can find it in Microeconomics- Introduction (Economics), Lesson 2 of our study material.