Which statement is true about scarcity and shortages?

Which statement is true about scarcity and shortages?

• A. Scarcity is the fundamental problem of limited resources relative to wants.
• B. Scarcity is a temporary shortage of a good.
• C. Shortages occur only when prices are too high.
• D. Shortages and scarcity are the same concept.

Answer: (A)

Scarcity occurs because resources such as land, labour and capital are finite while wants are unlimited, so societies must make choices about how to allocate those resources. This is a lasting condition in every economy, not something that disappears if prices move. Shortages are different: they are temporary gaps in a specific market where quantity demanded exceeds quantity supplied at the current price, often caused by price controls, supply disruptions, or sudden shifts in demand, and they can be resolved when prices adjust or supply increases. So the statement that scarcity arises from limited resources relative to wants correctly identifies the enduring problem. Shortages, being market-specific and temporary, are not the same as scarcity, and they aren’t caused only by high prices; neither of those describe scarcity itself.

Scarcity occurs because resources such as land, labour and capital are finite while wants are unlimited, so societies must make choices about how to allocate those resources. This is a lasting condition in every economy, not something that disappears if prices move. Shortages are different: they are temporary gaps in a specific market where quantity demanded exceeds quantity supplied at the current price, often caused by price controls, supply disruptions, or sudden shifts in demand, and they can be resolved when prices adjust or supply increases. So the statement that scarcity arises from limited resources relative to wants correctly identifies the enduring problem. Shortages, being market-specific and temporary, are not the same as scarcity, and they aren’t caused only by high prices; neither of those describe scarcity itself.