Scarcity exists because Question content area bottom Part 1 A. people take too much leisure time. B. some individuals have low income. C. human wants exceed the resources available to satisfy them. D. some people make bad economic decisions. E. the costs of production are high.
The Correct Answer and Explanation is:
Correct Answer: C. human wants exceed the resources available to satisfy them.
Explanation:
Scarcity is a fundamental concept in economics that arises because resources are limited, while human wants are virtually unlimited. This imbalance between limited means and unlimited desires is the root cause of scarcity.
Every society has a finite amount of resources such as land, labor, capital, and entrepreneurship. These resources are used to produce goods and services. However, people always have more wants and needs than can be fulfilled with the available resources. For example, individuals may desire more food, better housing, new technologies, luxury goods, and improved healthcare. But since the means to produce all of these at once are limited, choices must be made about how resources are allocated.
This leads to the necessity of making economic decisions. Societies must determine what to produce, how to produce it, and for whom it should be produced. These decisions are at the heart of economics and are driven by the reality of scarcity.
The other answer choices do not accurately capture the true reason for scarcity. While some people may have low incomes or make poor economic choices, these are individual conditions that do not explain scarcity at a societal or global level. High production costs or leisure preferences also do not cause scarcity; rather, they are factors influenced by scarcity and resource allocation decisions.
In essence, scarcity is not a result of poor management or high costs but is an unavoidable condition due to the natural limitation of resources. It forces individuals, businesses, and governments to prioritize needs and make trade-offs. Because we cannot have everything we want, we must decide what is most important and allocate resources accordingly. Understanding this concept is crucial for making informed economic choices.
