Multiple Choice
Why would a nation choose not to produce everything its citizens want?
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
Which of the following statements best describes the concept of scarcity in economics?
A
Scarcity means that choices are unnecessary because resources are unlimited.
B
Scarcity means that all goods are free and abundant.
C
Scarcity means that there are limited resources to satisfy unlimited wants.
D
Scarcity means that excess goods are always available for everyone.
Verified step by step guidance1
Step 1: Understand the concept of scarcity in economics. Scarcity refers to the fundamental economic problem that resources are limited while human wants are unlimited.
Step 2: Recognize that scarcity implies the need for making choices because not all wants can be satisfied due to limited resources.
Step 3: Evaluate each statement by comparing it to the definition of scarcity: it is not about resources being unlimited or goods being free and abundant.
Step 4: Identify the statement that correctly captures scarcity as the condition where limited resources must be allocated to satisfy unlimited wants.
Step 5: Conclude that the best description of scarcity is the statement: 'Scarcity means that there are limited resources to satisfy unlimited wants.'
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