In simple terms, economics is the study of how society manages which combination of resources and wants?

Introduction / Context:
This question examines your understanding of the standard textbook definition of economics. Almost all introductory books define economics as the study of how society manages scarce resources to satisfy unlimited wants. Remembering this pattern of words is very helpful, because many objective questions are built directly on it.

Given Data / Assumptions:

• The subject is the basic definition of economics.
• The options give different combinations of resources and wants being limited or unlimited.
• The correct statement must capture the idea of scarcity and choice.

Concept / Approach:
A central idea in economics is scarcity. Resources such as land, labour, capital, and natural resources are limited. At the same time, human wants and desires for goods and services are virtually unlimited. Because of this mismatch, society has to make choices about what to produce, how to produce, and for whom to produce. Thus the correct definition must include limited or scarce resources on one side and unlimited wants on the other.

Step-by-Step Solution:
Step 1: Identify options that recognise the limited nature of resources, since resources are never infinite.Step 2: Humans always have more wants than can be completely satisfied, so wants are effectively unlimited.Step 3: Any option stating that resources are unlimited is unrealistic and contradicts the concept of scarcity.Step 4: Options claiming that wants are limited or that there are no wants at all also contradict real world experience.Step 5: Therefore the only accurate statement is that economics studies how society manages limited resources and unlimited wants.

Verification / Alternative check:
You can confirm this by recalling the standard sentence used in many books: economics is the study of how society manages its scarce resources. Often the next line explains that because wants are unlimited while resources are scarce, societies must make choices and face trade offs. This directly matches the combination of limited resources and unlimited wants in the correct option.

Why Other Options Are Wrong:
If both resources and wants were limited, there would be no fundamental scarcity problem in the sense described in economics, since everything could be perfectly matched. Unlimited resources with unlimited wants would remove scarcity completely, which does not correspond to the real world. Limited wants with unlimited resources would also remove the need for economic decision making. Unlimited resources with no wants is an extreme and unrealistic case where economics would not be needed at all.

Common Pitfalls:
A frequent mistake is to focus only on scarcity of resources and forget to mention unlimited wants. Some learners memorise only that resources are scarce but do not link it to the continuing growth of human wants, which is what drives economic activity through time. Another pitfall is getting confused by the wording limited and unlimited when options are written in a compressed way. Read each part carefully, checking both the description of resources and of wants before choosing.

Final Answer:
Economics is the study of how society manages limited resources and unlimited wants.