Which statement about scarcity is true?

• A. Scarcity is not related to the concept of opportunity cost.
• B. Scarcity only affects poor countries and not wealthy ones.
• C. Scarcity can be completely eliminated through technological advancement.
• D. Scarcity exists because resources are limited and wants are unlimited.

Answer: (D)

Verified step by step guidance

1. Understand the definition of scarcity in microeconomics: Scarcity refers to the fundamental economic problem that arises because resources are limited while human wants are unlimited.
2. Recognize that scarcity is a universal condition affecting all economies, regardless of wealth, because resources such as time, money, labor, and raw materials are finite.
3. Recall that scarcity is directly related to opportunity cost, which is the value of the next best alternative foregone when making a choice, highlighting the trade-offs due to limited resources.
4. Evaluate the statements given by comparing them to the core concept of scarcity: it cannot be completely eliminated by technology because resources will always be limited relative to wants.
5. Conclude that the true statement is the one that correctly identifies scarcity as the condition where resources are limited and wants are unlimited.