The meaning of scarcity.
Answer to Problem 1KC
Option 'e' is correct.
Explanation of Solution
Scarcity is obviously shortage. The shortage of supply to the existing demand in the economy is denoted as scarcity in the economy. Whatever may be the demand, let it be the money, commodity, or anything that people demand, when the supply of the same is lower than the demand, then it is called scarcity of the item in the economy.
Option (e):
Human wants are unlimited, and there are no limits to the wants of the consumers. But the resources to meet human wants are limited, which means that there is scarcity of resources in the economy. The available scarce resources have many alternative uses that make choices for the consumers. Thus, scarcity forces the individuals to choose between the available choices. This indicates that option 'e' is correct.
Option (a):
Scarcity arises when the wants are more than the supply. This means when the supply of anything from money to goods and services are lower than the demand, there arises scarcity. Thus, when there is scarcity, not all the wants can be satisfied because the scarce resources have alternative uses. This makes option 'a' incorrect.
Option (b):
The consumers are free to choose between the alternative uses of the scarce resources and are not forced to accept one, which means that there is no abandoning of the consumer sovereignty. This means that option 'b' is also incorrect.
Option (c):
Scarcity arises when the wants are higher than the supply. The resources are having alternative uses and when the consumers lie about their wants, they cannot get the wants fulfilled, and this means that they would never lie about the wants, and so, option 'c' is incorrect.
Option (d):
The resources are limited, whereas the human wants are limited, and this makes scarcity in the economy. Thus, humans cannot make the unlimited resources because it is naturally formed. This means that option 'd' is incorrect.
Scarcity: The term “scarcity” defines the situation where the supply of something in the economy is lower than the required demand in the economy, which is obviously known as shortage.
Want to see more full solutions like this?
- Topic: Theory of Firm: Production & CostPlease help me answer all of these.arrow_forwardTopic: What is the world going to be like if we continue to have bilateral economic war in the next 25 years? the tensions that lead to war still exist: religion, money, natural resource, and history all provide way too many “reasons” for countries to want war to achieve their perception of national goals. Question: How important is money and Natural resources during bilateral economic wars and what are the effects. please answer in paragraphs, thank you for your time!arrow_forwardTopic: What is the world going to be like if we continue to have bilateral economic war in the next 25 years? the tensions that lead to war still exist: religion, money, natural resource, and history all provide way too many “reasons” for countries to want war to achieve their perception of national goals. Question: How does money and Natural resources effect our economy during wars? please answer in paragraphs, thank you for your time!arrow_forward
- Topic: “Challenges faced by rural farmers in Mt. Royal, Carriacou due to rising food prices”. 1. Based on the topic above provide a Methodology.arrow_forwardTopic: : Cost function, economies of scale, technological changearrow_forwardTopic A Problem: While on vacation, you go to a miniature golf course on a weekday and notice no other customers there while you golf. Why do you think a miniature golf course would stay open during the week when it seems like the revenue from so few customers could not possibly cover the costs of running the golf course? What is an example of another business that stays open even when it's slow, and their revenue does not seem like it could cover their costs?arrow_forward
- topic: managerial economicsarrow_forwardEconomics Question: Economics is the study of: (A) the distribution of surplus goods to those in need. ( B) affluence in a morally bankrupt world. (C) ways to reduce want to eliminate the problem of scarcity. (D) the choices we make because of scarcity. Don't use chatgpt please provide valuable answer otherwise be ready for disupvotearrow_forwardSubject : Literacy in English Revise the following thesis statements so they become thesis statements appropriate for agumentative essays : Total revenue of Bitcoin and Ethereum miners fell sharply in June compared to May 2021arrow_forward