Scarcity exists when: individuals can have more of any good. resources are unlimited. making choices among two or more alternatives is not necessary. individuals can have more of one good but only at the expense of another.
The Correct Answer and Explanation is:
Correct Answer:
Individuals can have more of one good but only at the expense of another.
Explanation:
Scarcity is a fundamental concept in economics that arises because resources such as time, money, labor, and raw materials are limited, while human wants and needs are virtually limitless. Due to this imbalance, individuals, societies, and governments must make choices about how to allocate resources efficiently.
When scarcity exists, obtaining more of one item or good typically means giving up something else. For instance, if a farmer uses more land to grow wheat, that same land cannot be used simultaneously to grow corn. This trade-off illustrates the idea that increasing the quantity of one good comes at the cost of decreasing the quantity of another. This condition defines opportunity cost — the value of the next best alternative that is foregone when a choice is made.
Scarcity does not mean that a good is rare or that it cannot be found. Even common goods like water or food are considered scarce if they are not available in sufficient quantities to satisfy all desires at zero cost. Because of this, economic systems have developed to prioritize how goods and services should be distributed.
The incorrect options misrepresent the nature of scarcity. If individuals could have more of any good without giving something up, scarcity would not exist. If resources were unlimited, the basic problem of economics would disappear. Likewise, if choices were unnecessary, there would be no need to evaluate trade-offs or allocate resources.
In reality, all economic decisions require considering the costs and benefits of various alternatives due to limited inputs. This necessity confirms the ever-present reality of scarcity in personal, business, and governmental decision-making.
