Economics 0455 · IGCSE · The nature of the economic problem

The nature of the economic problem — practice question

To bring down the price of oil, additional supplies are required. However, those who object are against the exploration of new locations because of the environmental harm it might create. Why does this statement illustrate the basic economic problem?

  • AOil is a limited resource.
  • BOil is expensive.
  • CThe exploration involves demand and supply.
  • DThere are external costs involved in production.

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