Question

Which of the following BEST illustrates the economic concept of scarcity?

a. Marie bought some stock for $1,000 last year; today, she sold the stock for $1,250.

b. Dan wants a bag of chips and a cola. Each costs one dollar. Dan has just $1.50.

c. In the winter, the hardware store charges more for snow shovels than it charges in the summer.

d. Jorge's boss tells him that if he gets the stockroom cleaned up by closing time, he can have the day off tomorrow.

Answer 1

The best illustration of scarcity is when Dan has to choose between a bag of chips and a cola due to limited funds, showcasing the need for decision-making in the face of limited resources.

Step-by-step explanation:

The economic concept of scarcity is best illustrated by option b: Dan wants a bag of chips and a cola. Each costs one dollar. Dan has just $1.50. This scenario exemplifies scarcity because Dan cannot satisfy all his wants with the limited resources (money) available to him, which forces him to make a decision between the two items.

Economics studies how individuals and societies manage their resources when they are limited and wants are unlimited. Even wealthy individuals cannot have everything, as resources like time are finite. Therefore, scarcity requires that choices be made on how to allocate these limited resources effectively.

In this scenario, Dan wants to purchase both items, but his limited budget prevents him from doing so. This reflects the scarcity of resources, such as money, that forces individuals to make choices and prioritize their needs.