Multiple Choice
Which of the following is true about scarcity?
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0. Basic Principles of Economics
Scarcity and Choice
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Which of the following best describes scarcity in economics?
A
Resources and wants are both unlimited
B
Resources and wants are both limited
C
Limited resources and unlimited wants
D
Unlimited resources and limited wants
Verified step by step guidance1
Understand the concept of scarcity in economics: Scarcity arises because resources are limited while human wants are unlimited.
Analyze each option by comparing it to the definition of scarcity:
Option 1: 'Resources and wants are both unlimited' - This cannot describe scarcity because if resources were unlimited, scarcity would not exist.
Option 2: 'Resources and wants are both limited' - This does not capture scarcity correctly because wants are generally considered unlimited.
Option 3: 'Limited resources and unlimited wants' - This matches the economic definition of scarcity, where limited resources cannot satisfy unlimited wants.
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