Which of the following statements best reflects the concept of scarcity in economics?

• A. Only people with low income experience scarcity, while the super wealthy do not.
• B. Scarcity is only a concern for governments, not individuals.
• C. All individuals, regardless of wealth, face limited resources and must make choices.
• D. Scarcity does not affect economic decision-making.

Answer: (C)

Verified step by step guidance

1. Understand the concept of scarcity in economics: Scarcity means that resources are limited while human wants are unlimited, so choices must be made about how to allocate these resources.
2. Recognize that scarcity applies universally to all individuals and entities because no one has unlimited resources, regardless of their income or wealth.
3. Evaluate each statement by comparing it to the definition of scarcity: For example, the idea that only low-income people experience scarcity is incorrect because scarcity affects everyone.
4. Identify that scarcity forces individuals, governments, and organizations to make decisions about what to produce, consume, or save, which is central to economic decision-making.
5. Conclude that the statement 'All individuals, regardless of wealth, face limited resources and must make choices' best reflects the concept of scarcity because it captures the universal and fundamental nature of scarcity in economics.