Question

What does the concept of scarcity explain? Choose three answers.

why a product could lose significant value over time.
why people continue to purchase different products.
why consumers are willing to pay high prices for items.
why decisions must be made on how to use resources
why resources can be both renewable and nonrenewable.
why a single resource has more value than another resource.

Answer 1

- Why consumers are willing to pay high prices for items — scarcity (limited supply relative to wants) raises price.
- Why decisions must be made on how to use resources — scarcity forces trade-offs and choices about allocation.
- Why a single resource has more value than another resource — relative scarcity and usefulness determine a resource’s value.