In Economics, the Term "Scarcity" Refers to the Fact That

question 41

Multiple Choice

In economics, the term "scarcity" refers to the fact that

• A) everything really worthwhile costs money.
• B) even in wealthy countries like the United States, some people are poor.
• C) no society can produce enough to satisfy fully the desires of people for goods and services.
• D) sometimes shortages of a good arise when its price is set below the market equilibrium.

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Definitions:

Cost Behavior

The manner in which a cost changes as the related activity level changes, categorized into fixed, variable, and mixed costs.

Opportunity Cost

The potential benefit that is given up when one alternative is selected over another.

Manufacturing Company

A business entity engaged in the transformation of raw materials into finished goods for sale by using labor, machines, and chemical or biological processing.

Contribution Margin

The amount by which sales revenue exceeds variable costs; it contributes to covering fixed costs and generating profit.