What Is the Difference Between a Shortage and Scarcity

question 241

Multiple Choice

What is the difference between a shortage and scarcity?

• A)Scarcity will almost always exist,but a shortage will exist only if the price is kept below the equilibrium level.
• B)Scarcity is a result of two or more alternative uses,and quantities of supply and demand adjusting to flexible prices will create shortages.
• C)A shortage will exist when a good is scarce.
• D)There is no distinction between the two.They are the same thing.

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Definitions:

Surtax

An additional tax levied on top of the base tax liability; often applied to income exceeding a certain threshold.

Tax Rates

The percentage at which an individual or corporation is taxed, varying based on income level.

Long-term Capital Gains

Profits from the sale of an asset held for more than a year, generally taxed at a lower rate than short-term capital gains or regular income.

Collectibles

Items of personal property that are considered valuable due to rarity, demand, or historical significance, potentially subject to special capital gains tax rates upon sale.