Multiple Choice
How would a manufacturer benefit by using fewer scarce resources?
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
If an item is scarce, which of the following is most likely true?
A
The item has no value in any market.
B
There is no opportunity cost associated with the item.
C
People must make choices about how to allocate the item.
D
The item is available in unlimited quantities.
Verified step by step guidance1
Understand the concept of scarcity in microeconomics: Scarcity means that a resource or item is limited in quantity and cannot satisfy all the wants and needs of people.
Recognize that scarcity implies a need for choice because there is not enough of the item to satisfy everyone fully.
Recall that when a resource is scarce, people face opportunity costs, meaning choosing to use the item in one way means giving up the next best alternative use.
Evaluate the given options: Scarcity does not mean the item has no value; in fact, scarcity often gives an item value. It also does not mean there is no opportunity cost or that the item is unlimited.
Conclude that the correct implication of scarcity is that people must make choices about how to allocate the item, reflecting the fundamental economic problem of limited resources and unlimited wants.
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