Multiple Choice
In microeconomics, the phrase 'other things held constant' is often used to indicate which of the following assumptions when analyzing scarcity and choice?
75
views
0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
Which of the following is NOT considered scarce according to the economic definition of scarcity?
A
Labor in a competitive job market
B
Clean air in a polluted city
C
Unlimited wants
D
Fresh water in a drought region
Verified step by step guidance1
Step 1: Understand the economic definition of scarcity. Scarcity means that a resource is limited in supply relative to the demand for it, so it is not freely available in unlimited quantities.
Step 2: Analyze each option to determine if it is scarce. For example, labor in a competitive job market is scarce because there is a limited number of workers relative to jobs.
Step 3: Consider clean air in a polluted city. Since pollution reduces the availability of clean air, it becomes limited and thus scarce.
Step 4: Evaluate fresh water in a drought region. Drought conditions reduce water supply, making fresh water scarce in that area.
Step 5: Identify unlimited wants. Wants are desires for goods and services that are unlimited by nature, meaning they are not scarce because they are not a resource but a demand. Therefore, unlimited wants are NOT considered scarce.
Related Videos
Related Practice
