Which of the following is true about scarcity?

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

Answer: (C)

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. Analyze each statement in the problem by comparing it to the definition of scarcity:
3. 1. "Scarcity only affects poor countries and not wealthy ones." - Consider whether scarcity depends on wealth or on the availability of resources relative to wants.
4. 2. "Scarcity is not related to the concept of opportunity cost." - Recall that opportunity cost arises because of scarcity, as choosing one option means giving up another.
5. 3. "Scarcity exists because resources are limited and wants are unlimited." - This aligns with the basic economic definition of scarcity.
6. 4. "Scarcity can be completely eliminated through technological advancement." - Think about whether technology can make resources unlimited or if scarcity is a permanent condition.