Future Business Leaders of America (FBLA) Agribusiness Practice Test

How is 'Scarce' defined in economic terms?

1. Abundant and available

2. Sufficient but underused

3. Deficient in quantity relative to demand

4. Excessive in supply

The correct answer is: Deficient in quantity relative to demand

In economic terms, the definition of 'scarce' relates directly to the availability of resources in relation to the demand for those resources. When something is described as scarce, it means that there is a deficiency in quantity when compared to what is desired or needed. This concept is fundamental in economics because it highlights the necessity of making choices and trade-offs in the allocation of limited resources. Scarcity drives the need for pricing mechanisms and market strategies, as individuals and companies must prioritize their needs and wants based on what is available. In contrast, the other definitions provided do not capture the essence of scarcity: being abundant means that a resource is widely available, being sufficient but underused suggests that there is enough resources but they are not fully utilized, and excessive in supply indicates the opposite of scarcity, that there is an abundance which does not require prioritization or choice. Recognizing the limited nature of resources compared to demand is crucial for understanding how economies function and why certain economic principles are in play.