Which of the following is a consequence of scarcity?

• A. All wants and needs can be satisfied without trade-offs.
• B. Individuals and societies must make choices about how to allocate limited resources.
• C. Opportunity cost does not exist.
• D. Resources are available in unlimited quantities.

Answer: (B)

Verified step by step guidance

1. Understand the concept of scarcity: Scarcity means that resources are limited while human wants are unlimited, which creates the need to make choices.
2. Recognize that because resources are limited, individuals and societies cannot satisfy all wants and needs simultaneously without making trade-offs.
3. Identify that making choices about how to allocate these limited resources leads to opportunity costs, which is the value of the next best alternative foregone.
4. Evaluate each option in the problem: options stating unlimited resources or no opportunity cost contradict the fundamental idea of scarcity.
5. Conclude that the correct consequence of scarcity is that individuals and societies must make choices about how to allocate limited resources.