Doesn scarcity simply mean that a good is in short supply?
A.Scarcity in economic terms is a little more complicated. Scarcity results because natural resources, human resources and capital resources are not available in sufficient quantity to satisfy all wants for them. In other words resources are limited and wants are unlimited. Only “free goods” like air are in most cases not scarce. For example, with production choices come decisions concerning what to produce from a particular natural resource. If the choice is made to produce paper for textbooks from a stand of trees, then no other product can be produced from that particular stand of timber. Yet, many other products are desired. Thus an opportunity cost decision must be made. That means that the next best alternative good cannot be produced. Therefore economic resources are scarce.
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