Question

Which of the following is an example of scarcity, rather than shortage? A popular toy is sold out during the busy holiday season. A person wants an endless supply of everything but cannot have it. Gasoline was rationed in America during World War II. You have spent your last penny and payday is a week away.

Answer 1

Answer:

C) Gasoline was rationed in America during World War II

Explanation:

Scarcity is the situation where there is no human control over the demand and supply of the goods and services. Shortage is the situation which is under the control of human.

As if there is shortage more can be supplies but if there is a scarcity of a resource then it is a natural process which takes time or there are certain political and economic situations which lead to scarcity.

Answer 2

Answer:

The correct answer is the option B: A person wants and endless supply of everything but cannot have it.

Explanation:

First of all, the term scarcity refers to the particular situation in economics where there is not enough of something regarding the natural resources where they come from. Meanwhile, the concept of shortage establishes that there is not enough of a product regarding the fact that the demand exceed the supply but it has nothing to do with the natural resources. Moreover, the scarcity is a situation that stays permanent in time, while shortage is just temporary.

Secondly, once stated the differences between those two concepts, it is understandable that the case in where the gasoline is rationed in America during the World War II is due to the fact that the fuel was being used for the war rather for the cars from the cities and it was only a temporary phenomen created by the market, once the war finished, the supply went back to normal again.

Finally, the correct answer is the example in where a person wants a supply of everything and can not have it due to the fact that there is not enough resources of everything for everyone and the economy needs to find a way to redistribute their resources and given a certain time every resource will end so therefore that example is impossible due to scarcity.