Final answer:
Scarcity is when unlimited human wants exceed the limited supply of resources, which means there are not enough productive resources to meet all demands.
Step-by-step explanation:
Scarcity refers to the basic economic problem that arises because people have unlimited wants but resources are limited. This means that there are not enough productive resources to fulfill all human desires and needs. Scarcity requires that people make choices about how to allocate resources efficiently.
In response to the student's question, the correct answer is 1) Not enough productive resources. Because of scarcity, every choice involves an opportunity cost, or the understanding that choosing one thing means giving up on another. Scarcity is foundational to the study of economics, as it necessitates the analysis of how to distribute limited resources to satisfy unlimited needs and wants.