What is the difference between a shortage and scarcity?

Question

A shortage results from rising prices; scarcity results from falling prices.

A shortage is a lack of all goods and services; scarcity concerns a single item.

A shortage can be temporary or long-term, but scarcity always exists.

There is no real difference between a shortage and scarcity.

Answer 1

The correct answer is:

A shortage can be temporary or long-term, but scarcity always exists.

Explanation:

• Scarcity refers to the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. It is a pervasive condition that exists due to limited resources available to meet unlimited wants.
• Shortage, on the other hand, is a situation that occurs when the quantity demanded of a good or service exceeds the quantity supplied at a certain price. This can happen due to various reasons such as price controls, natural disasters, or increased demand, and it can be temporary or long-lasting.

Therefore, while scarcity is a constant condition, shortages are situational and can vary over time.