Question

Which of the following would eliminate scarcity as an economic problem? a. Moderation of people's competitive instincts b. Discovery of sufficiently large new energy reserves c. Resumption of steady productivity growth d. None of the above because scarcity cannot be eliminated

Short answer

d. None of the above because scarcity cannot be eliminated.

Step-by-step solution

Analyzing option a: Moderation of people's competitive instincts

This option suggests that if people's competitive instincts are moderated, scarcity as an economic problem will be eliminated. While this may help alleviate some resource competition, it does not directly address the issue of limited resources and unlimited wants. Furthermore, moderations in competition could lead to reduced innovation and productivity, which might not help in addressing the scarcity problem.

Analyzing option b: Discovery of sufficiently large new energy reserves

The discovery of large new energy reserves might indeed alleviate some scarcity in the energy sector, but it would not necessarily eliminate scarcity as an economic problem altogether. Even with more energy available, there are still many other resources that could be scarce, and unlimited human wants may still persist.

Analyzing option c: Resumption of steady productivity growth

Steady productivity growth can help meet the increasing demands of a growing population. However, it alone does not necessarily eliminate scarcity as an economic problem. Higher productivity may still be bounded by the limited availability of resources and might not be able to fully satisfy unlimited human wants. #Step 2: Evaluating the options and selecting the best answer#

Evaluating and selecting the correct answer

Based on the analysis of each option, it can be concluded that none of the options directly address the fundamental issue of scarcity, which arises due to limited resources and unlimited human wants. Thus, the correct answer would be: d. None of the above because scarcity cannot be eliminated

Key concepts

Understanding Economic Scarcity

Economic scarcity is a fundamental concept in economics that describes the perpetual state of limited resources in contrast to the unlimited wants of people. Scarcity is what drives the need for effective allocation and is the reason why choices must be made regarding the use of resources.

In the face of scarcity, societies must answer key questions like what to produce, how to produce, and for whom to produce. This is necessary because the resources such as labor, land, and capital are finite and can be used in multiple ways. The limited nature of resources implies that obtaining more of one good or service usually comes at the expense of being able to produce less of another.

The Phenomenon of Unlimited Wants

Humans naturally desire a wide range of goods and services, and these desires can often seem unlimited. From the fundamental needs like food and shelter to the more complex desires like technology and leisure, there's always something more that people wish to have. This concept of 'unlimited wants' refers to the idea that human appetite for goods and services is never fully satisfied.

Even with increases in income or availability of products, the expectation and desire for better quality or more variety also increases. This creates constant pressure on the available resources, which necessitates prioritization and decision-making in the face of constraints. It is why even abundant resources can become scarce when the wants for them surpasses their availability.

Impact of Productivity Growth

Productivity growth is the increase in the output of goods and services per unit of input. It is a key factor that can potentially alleviate some aspects of scarcity by making the production process more efficient.

Improvements in technology, innovation, and the education and skill levels of the workforce all contribute to productivity growth. This growth means more can be produced with the same amount of resources, which is critical for addressing the needs of a growing population. However, while productivity can reduce scarcity for some goods or services, it is not a comprehensive solution because it doesn't fully outpace the unlimited wants and needs of society.