Which of the following best demonstrates the concept of scarcity?

Which of the following best demonstrates the concept of scarcity?

• A. Buying as many goods as desired
• B. Having unlimited budgets
• C. Resource shortage despite high demand
• D. Excess production capability

Answer: (C)

Scarcity is defined as the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. The concept emphasizes that resources are finite, and this limitation necessitates choices about how to allocate available resources. When considering resource shortage despite high demand, it illustrates scarcity accurately because it highlights a scenario where the resources to meet demand are not sufficient. This mismatch between demand and supply leads to competition for those limited resources, necessitating prioritization and decision-making among consumers and producers. In contrast, options that suggest an abundance of resources, such as buying as many goods as desired, having unlimited budgets, or excess production capability, do not align with the concept of scarcity. These options imply that resources are plentiful and accessible, which contradicts the very essence of scarcity, where there is not enough to satisfy all desires. Therefore, the correct answer emphasizes the reality of limited resources in the face of high demand, effectively capturing the concept of scarcity in economics.

Scarcity is defined as the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. The concept emphasizes that resources are finite, and this limitation necessitates choices about how to allocate available resources.

When considering resource shortage despite high demand, it illustrates scarcity accurately because it highlights a scenario where the resources to meet demand are not sufficient. This mismatch between demand and supply leads to competition for those limited resources, necessitating prioritization and decision-making among consumers and producers.

In contrast, options that suggest an abundance of resources, such as buying as many goods as desired, having unlimited budgets, or excess production capability, do not align with the concept of scarcity. These options imply that resources are plentiful and accessible, which contradicts the very essence of scarcity, where there is not enough to satisfy all desires. Therefore, the correct answer emphasizes the reality of limited resources in the face of high demand, effectively capturing the concept of scarcity in economics.