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Chapter 1: Problem 1

The United States is considered a rich country because Americans can choose from an abundance of goods and services. How can there be scarcity in a land of abundance?

Short Answer

Expert verified
Scarcity can exist in a land of abundance because resources to create goods and services are always limited, but wants and needs are unlimited. Even in a rich country like the United States, choices must be made about how to use and distribute these resources most efficiently to satisfy as many needs and wants as possible.

Step by step solution

01

Understanding the Concepts

Firstly, understand the key concepts: 'Scarcity' refers to basic economic problem of having seemingly unlimited human wants and needs in a world with Limited resources. 'Riches' and 'abundance' refer to the availability of resources and goods in excess.
02

Interpreting the Question

Next, interpret the question: The United States, despite being a rich nation with abundant goods available, experiences scarcity. This contradiction seems confusing, but it's crucial to focus on the evidence of scarcity in the context of limited resources versus unlimited wants.
03

Applying Concepts to Real Life

Last stage is the application of these concepts: Despite having an abundance of goods and services including food, clothing, housing, etc., resources are limited. These include natural resources, human resources, and capital goods. Moreover, human wants and needs exceed the available resources, leading to scarcity. The society must make choices about how to allocate these resources efficiently to meet the most needs and wants. This scarcity amid abundance occurs not only in the United States but in other countries as well.

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Most popular questions from this chapter

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