There are not enough of four goods to satisfy the wants of people. For good A, this is true when the price is $100. This is true for good B at a price of $10, for good C at a price of $1, and for good D at a price of zero. Which situation reflects scarcity rather than shortage?
A) A
B) B
C) C
D) D

Question

Quizplus · Accepted Answer

Scarcity refers to the limited nature of resources and the fact that they cannot satisfy unlimited wants. In the given scenario, good D has scarcity because even though its price is zero, it is still not enough to satisfy everyone's wants. Shortage, on the other hand, refers to a temporary situation where demand exceeds supply due to some external factor such as a natural disaster or a sudden change in consumer preferences. Therefore, option D reflects scarcity as there is not enough of it to satisfy everyone's wants even though its price is zero.

There Are Not Enough of Four Goods to Satisfy the Wants