Which of the following best illustrates the concept of scarcity?

• A. A person can consume as much as they want without ever running out of resources.
• B. A student must choose between spending time studying for an exam or going out with friends because there is limited time available.
• C. A country has enough resources to satisfy all the wants of its citizens without any trade-offs.
• D. A store offers unlimited free products to every customer.

Answer: (B)

Verified step by step guidance

1. Understand the concept of scarcity: Scarcity in microeconomics means that resources are limited while human wants are unlimited, so choices must be made about how to allocate these limited resources.
2. Analyze each option to see if it reflects limited resources and the need to make choices or trade-offs.
3. Option 1 states a person can consume unlimited resources without running out, which contradicts scarcity because it implies resources are unlimited.
4. Option 2 describes a student choosing between studying and socializing due to limited time, which clearly shows scarcity since time is a limited resource requiring trade-offs.
5. Options 3 and 4 describe situations where resources are unlimited or freely available, which do not illustrate scarcity.