Final answer:
In International Trade, scarcity typically leads to an increase in prices of items as demands grow, due to the limited supply of resources. The correct option is C.
Step-by-step explanation:
In the context of International Trade, scarcity affects trade by influencing pricing and availability of goods. If an item is scarce, it means the supply is limited due to finite resources while the demand from consumers continues to remain high. Therefore, the correct answer is that C) Prices of the scarce item will increase with growing demand for the item, aligning with the economic principle that limited supply coupled with high demand leads to higher prices.
This is because countries and individuals have to make choices about how to allocate their finite resources to satisfy unlimited wants and needs. As resources are distributed based on these principles, scarcity drives the decision-making process internationally on what should be produced, how it should be made, and to whom it will be distributed.