If goods or services are scarce, which of the following must occur?

• A. Scarcity has no impact on economic decision-making.
• B. Individuals must make choices about how to allocate resources.
• C. Prices will always remain constant.
• D. There will be unlimited access to all goods and services.

Answer: (B)

Verified step by step guidance

1. Understand the concept of scarcity: Scarcity means that resources are limited while human wants are unlimited, so not all desires can be satisfied simultaneously.
2. Recognize the implication of scarcity on decision-making: Because resources are limited, individuals and societies must decide how to allocate these resources efficiently.
3. Identify that scarcity forces choices: Since we cannot have unlimited amounts of all goods and services, individuals must prioritize and make trade-offs among alternatives.
4. Note that scarcity does not imply prices remain constant; prices can fluctuate based on supply and demand.
5. Conclude that scarcity leads to the necessity of making choices about resource allocation, which is fundamental to economic decision-making.