O-LevelEconomicsThe basic economic problem2281/12 · Oct/Nov 2021 · Q11 Mark
To help reduce the price of oil, new supplies are needed. However, objectors oppose exploration of new sites because of the environmental damage it may cause. Why is this statement an example of 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.
✓ Correct answer
A: Oil is a limited resource.
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