Which statement defines scarcity most accurately?

• A. The unlimited availability of resources
• B. The abundance of capital goods
• C. Limited quantities of resources to meet unlimited wants
• D. The equal distribution of wealth

Answer: (C)

Scarcity occurs when resources are limited and wants are unlimited. Because money, time, land, and labor are finite, people, firms, and societies must make choices about how to use them, so not every want can be satisfied. The statement that fits this idea best is that resources exist in limited quantities while wants are unlimited. This imbalance is what forces trade-offs and opportunity costs—choosing one use for a resource means giving up another possible use. For example, a family with a fixed budget must decide what to buy and what to skip, and a country must prioritise what to produce. The other statements miss the core issue: unlimited resources describes the opposite of scarcity, abundance of a particular resource doesn’t define scarcity, and equal wealth distribution speaks to equity rather than the basic problem of limited resources.