Scarcity implies that resources are limited while human wants are unlimited. Therefore, we have to choose among the scarce resources based on our preferences and needs. To obtain more of one good or service, we have to sacrifice some other valuable alternative, which is the opportunity cost of consumption.

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Because of Scarcity

Question 36

Multiple Choice

Because of scarcity:

A) we must sacrifice valuable alternatives to obtain more goods and services we desire.
B) the opportunity cost of consumption is zero.
C) we can obtain more of a desirable good without sacrificing other goods and services.
D) shortages of goods prevail at current market prices.

Correct Answer: