Chapter 2, Problem 10AA

To determine

To analyze the basic question that depends on the availability of natural resource in a nation.

Explanation of Solution

Scarcity means the difference between a human being's limited resources and boundless desires. It is the fundamental problem faced by all economies. The availability of natural resources in a nation is limited and human want is unlimited. Therefore, one commodity cannot be produced without sacrificing another. So, the nation has to think about the basic question what to produce from a given resources. The resources are allocated to produce those commodities first which are most important.