Multiple Choice
When you must give something up in order to get something else, it is called:
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
Most resources are nonrenewable, and wants and needs are unlimited. This is an example of:
A
market equilibrium
B
scarcity
C
diminishing returns
D
opportunity cost
Verified step by step guidance1
Understand the key terms in the problem: 'nonrenewable resources' means resources that cannot be replenished once used, and 'unlimited wants and needs' means that people always desire more goods and services than can be provided.
Recall the definition of scarcity in microeconomics: scarcity occurs when limited resources are insufficient to satisfy unlimited wants and needs.
Analyze the options given: market equilibrium refers to a balance between supply and demand, diminishing returns relate to productivity changes when increasing inputs, and opportunity cost is the value of the next best alternative foregone.
Match the problem description to the correct concept: since the problem highlights limited resources and unlimited wants, it directly illustrates scarcity.
Conclude that the situation described is an example of scarcity because it captures the fundamental economic problem of limited resources versus unlimited desires.
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