The philosophy of scarcity states that:

• A. Resources are abundant and unlimited
• B. Society must efficiently allocate resources because wants are unlimited and resources finite
• C. Prices can eliminate scarcity
• D. Scarcity does not affect agricultural planning

Answer: (B)

Scarcity means resources are limited while wants are unlimited, so decisions have to be made about how to use what we have. Because of that, society must allocate resources efficiently, weighing trade-offs and considering opportunity costs. In agriculture, for example, land, water, and inputs like seeds and fertilizer are finite, so choices about what to grow, how much to invest in irrigation, and how to use labor require maximizing benefits given the limits. Prices and other signals help guide these choices by showing where resources are valued, but they can’t create more resources. That’s why the best understanding is that society must allocate resources efficiently because wants are unlimited and resources finite. The other statements don’t fit: resources aren’t infinite; prices don’t eliminate scarcity; scarcity does affect agricultural planning.