Which of the following best describes scarcity?

• A. The condition in which unlimited wants exceed limited resources
• B. The situation where resources are distributed equally among all individuals
• C. The ability to produce all goods and services without any opportunity cost
• D. The existence of abundant resources for every need and want

Answer: (A)

Verified step by step guidance

1. 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.
2. Recognize that scarcity means there are not enough resources to satisfy all desires, which forces individuals and societies to make choices about how to allocate resources efficiently.
3. Evaluate each option by comparing it to the definition of scarcity: The correct description should highlight the imbalance between unlimited wants and limited resources.
4. Identify that 'The condition in which unlimited wants exceed limited resources' captures the essence of scarcity, as it emphasizes the limitation of resources relative to desires.
5. Note that other options either describe equality, absence of opportunity cost, or abundance, which do not align with the economic meaning of scarcity.