Assertion (A): The central problems arise in every economy, rich or poor.
Reason (R): In a market economy, prices guide how resources are used.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

A is true: scarcity of resources relative to wants exists in every economy.
R is true too, but it describes how one kind of economy solves the problems, not why the problems arise.

Worth noting

The reason the problems arise is scarcity; R answers a different question.

Concept: Why the problems arise versus how they are solved
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsScarcity and the central problems

Practise this chapter →

Ten questions from Central Problems & the PPC, at your own pace.

Assertion (A): The central problems arise in every economy, rich or poor.Reason (R): In a market economy, prices guide how resources are used.

Explanation

Assertion (A): The central problems arise in every economy, rich or poor.
Reason (R): In a market economy, prices guide how resources are used.