Question

Cheizza, a pizza vendor in the country of Wisbane, believes that the taste of fresh cheese in its pizzas is its unique selling point. However, recently there has been a rise in the number of pizza vendors in Wisbane who have also started using fresh cheese to prepare their pizzas. This has led to a drastic increase in the demand for cheese. However, the amount of milk produced in the country is insufficient to meet the increased demand for cheese. In the context of changing environments, which of the following does this scenario best illustrate?

a.Resource scarcity.
b.Buyer dependence.
c.Discontinuous change.
d.Punctuated equilibrium.

Answer 1

The correct answer is letter "A": Resource scarcity.

Step-by-step explanation:

Resource scarcity is the fundamental economic issue by which individuals have limitless desires and needs but depend on limited sources to meet them. Because of this scenario, individuals must trade-off the fulfillment of some desires, so that others can also be met.

In the example, the scarce resource is the milk that is useful to produce cheese for the pizzas sold in Wisbane.

Answer 2

Answer: Option (a) is correct.

Step-by-step explanation:

Cheizza, a pizza vendor knows that the fresh cheese is the unique selling point for him. And because of this fresh cheese, the demand for his pizza is drastically increases. So, for meeting this demand, he have to purchase more cheese.

We know that cheese is made up from milk and milk is used as an input for the production of cheese. But milk is a raw material and limited in quantity to meet this demand.

Cheizza also knows that cheese is used in the pizzas, hence, if there is any changes in the supply of cheese, as a result it directly affects the demand for pizzas.

Therefore, there is a scarcity of resources in the form of milk.