What is the difference between a shortage and scarcity?
A) Scarcity will always exist because choices must be made, but a shortage will only exist if the price is kept below the equilibrium level.
B) Scarcity is a result of two or more alternative uses and will always exist, and quantities of supply and demand adjusting to flexible prices will create shortages.
C) A surplus will exist when a good is scarce; a shortage merely implies that there isn't as much of something as people would like, which is nearly always the case.
D) There is no distinction between the two. They are the same thing.
Answer: A) Scarcity will always exist because choices must be made, but a shortage will only exist if the price is kept below the equilibrium level.
You might also like to view...
Which of the following would be most likely to improve the standard of living of the residents of a less-developed country?
a. The development of strong labor unions. b. A sharp increase in the legal minimum wage. c. An increase in expenditures on education and capital investment. d. Rapid growth rate of the money supply.
In the United States in 2016, the percentage of firms that employed more than 200 workers and offered health insurance as a fringe benefit to the workers was about
A) 29%. B) 42%. C) 61%. D) 98%.