Multiple Choice
In the debate over guns vs. butter, what does the trade-off between these two goods illustrate in microeconomics?
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
Which of the following scenarios most accurately reflects the concept of scarcity?
A
A person receives a gift card with no expiration date and unlimited balance.
B
A store offers unlimited free samples of a product to every customer.
C
A farmer harvests crops from a field that produces more than enough food for everyone in the community.
D
A student must choose between spending time studying for an exam or working a part-time job because there are only 24 hours in a day.
Verified step by step guidance1
Understand the concept of scarcity: Scarcity in economics means that resources are limited while human wants are unlimited, so choices must be made about how to allocate these limited resources.
Analyze each scenario to identify if there is a limitation or constraint on resources or time:
1. A person with a gift card that has no expiration and unlimited balance implies no limitation on money, so no scarcity.
2. A store offering unlimited free samples means the product is not limited for customers, so no scarcity.
3. A farmer producing more than enough food means the resource (food) is abundant, so no scarcity.
4. A student choosing between studying or working because there are only 24 hours in a day shows a clear limitation of time, a scarce resource, requiring a trade-off.
Conclude that the scenario involving the student choosing how to allocate limited time best reflects the concept of scarcity.
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