Scarcity implies that:

• A. prices will always remain constant in the market
• B. resources are limited and choices must be made about their allocation
• C. all wants and needs can be satisfied without trade-offs
• D. there is no need for opportunity cost considerations

Answer: (B)

Verified step by step guidance

1. Understand the concept of scarcity in microeconomics: Scarcity means that resources are limited relative to the unlimited wants and needs of people.
2. Recognize that because resources are limited, individuals and societies must make choices about how to allocate these resources efficiently.
3. Know that scarcity leads to trade-offs, meaning choosing more of one thing results in having less of another.
4. Realize that scarcity necessitates the concept of opportunity cost, which is the value of the next best alternative foregone when a choice is made.
5. Conclude that scarcity does not imply prices remain constant, nor that all wants can be satisfied without trade-offs, but rather that limited resources require careful allocation and consideration of opportunity costs.