Which of the following statements is true about scarcity?
A) Scarcity refers to the situation in which unlimited wants exceed limited resources.
B) Scarcity is not a problem for the wealthy.
C) Scarcity is only a problem when a country has too large a population.
D) Scarcity arises when there is a wide disparity in income distribution.

Question

Quizplus · Accepted Answer

Scarcity refers to the condition where the unlimited wants exceed the limited resources, which is a fundamental economic problem. The availability of resources is finite, whereas the human wants and needs are infinite, making it impossible to satisfy all human wants with the limited resources available. Therefore, the correct choice is A.

B) is incorrect because scarcity affects everyone, including the wealthy. Although the wealthy have enough resources to fulfill their basic needs, they also face scarcity when it comes to fulfilling their numerous wants and desires.

C) is incorrect because population size alone does not cause scarcity. A country with a small population can still face scarcity if its resources are limited, and its demands for goods and services are high.

D) is incorrect because income distribution is not the primary cause of scarcity. Income distribution can affect the allocation of resources and lead to inequality, but scarcity itself arises due to the limited availability of resources in the face of unlimited wants.

Which of the Following Statements Is True About Scarcity