In resource allocation, what does the term 'scarcity' imply?

Practice Questions

Q1
In resource allocation, what does the term 'scarcity' imply?
  1. Resources are abundant and easily accessible.
  2. There is a limited availability of resources relative to demand.
  3. Resources can be allocated without any constraints.
  4. All resources are equally important.

Questions & Step-by-Step Solutions

In resource allocation, what does the term 'scarcity' imply?
  • Step 1: Understand that resources are things we use to meet our needs, like money, time, and materials.
  • Step 2: Recognize that 'scarcity' means there is not enough of these resources to satisfy everyone's wants and needs.
  • Step 3: Realize that because resources are limited, people have to make choices about how to use them.
  • Step 4: Conclude that scarcity leads to competition for resources, as many people want more than what is available.
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