Questions: 1. Which of the following situations represents an economic problem? a) A student trying to decide how to spend his weekly allowance. b) A country choosing to sacrifice some privacy in order to gain more security. c) Neither situation is an example of an economic problem. d) Both situations are examples of an economic problem.

The answer is a) A student trying to decide how to spend his weekly allowance.

This situation represents an economic problem because it involves making choices about how to allocate limited resources (the student's allowance) to satisfy various wants or needs. This is a classic example of the economic problem of scarcity, where individuals must decide how to use their limited resources effectively.

While this situation involves making a choice, it is more related to a trade-off between privacy and security rather than an economic problem in the traditional sense. Economic problems typically involve decisions about the allocation of scarce resources, such as money, time, or materials.

This option is incorrect because option a clearly represents an economic problem.

This option is incorrect because, as explained, only option a is a clear example of an economic problem. Option b involves a trade-off that is not primarily economic in nature.