Which of the following statements is true about scarcity?

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

Answer: (A)

Verified step by step guidance

1. Step 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. Step 2: Analyze each statement in the problem to see if it aligns with the definition of scarcity.
3. Step 3: Evaluate the statement 'Scarcity exists because resources are limited and wants are unlimited.' This matches the core economic concept of scarcity.
4. Step 4: Consider the statement 'Scarcity only occurs in poor countries.' Scarcity is a universal condition affecting all economies, regardless of wealth, so this statement is false.
5. Step 5: Review the statements about scarcity not being related to opportunity cost and scarcity being completely eliminated by technology. Scarcity is directly related to opportunity cost, and while technology can alleviate scarcity, it cannot completely eliminate it.