Multiple Choice
Which of the following statements about scarcity is true?
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0. Basic Principles of Economics
Scarcity and Choice
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Which of the following best describes scarcity?
A
The situation where resources are distributed equally among all individuals
B
The condition in which unlimited wants exceed limited resources
C
The ability to produce all goods and services without any constraints
D
The presence of abundant resources for every need and want
Verified step by step guidance1
Understand the concept of scarcity in microeconomics: Scarcity refers to the fundamental economic problem that arises because resources are limited while human wants are unlimited.
Identify the key elements in the problem: unlimited wants and limited resources. Scarcity occurs when these two conditions exist simultaneously.
Evaluate each option by comparing it to the definition of scarcity: The correct description should highlight the imbalance between unlimited wants and limited resources.
Recognize that scarcity is not about equal distribution of resources, nor about the ability to produce without constraints, nor about abundance of resources.
Conclude that the best description of scarcity is: 'The condition in which unlimited wants exceed limited resources.'
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