Question

What do economists mean when they state that goods are scarce?

• A. That there is shortage or insufficient supply of the good at the existing price.
• B. It is impossible to expand the availability of the good.
• C. People will want to buy more of the good regardless of price.
• D. The amount the good the people would like to have exceeds the supply that is freely available from nature.

Answer 1

The correct option is A That there is shortage or insufficient supply of the good at the existing price.

Scarce goods refers to the shortage in the supply of goods where the current supply is unable to meet the demand at a pre-existing price rate which usually is a cause of ineffective allocation of resources.