There is scarcity when

Analyze the question: The question asks for the condition under which scarcity exists, which is a basic concept in Economics.

Explain the concept: Scarcity is the central problem of economics. It means resources (land, labour, capital, entrepreneurship) are limited, while human wants are unlimited. Because of this, society cannot satisfy every want and must make choices, which leads to opportunity cost.

In simple terms, scarcity exists when the demand for resources is greater than the supply of them, so there is not enough to go around.

Solution, option by option:

• A. The means exceed society's wants. Wrong. If means were more than wants, there would be abundance, not scarcity.
• B. Demand for resources is greater than its supply. Correct. Wants and the demand for resources outstrip the available supply, which is the definition of scarcity.
• C. Productive resources are in excess. Wrong. Excess resources mean surplus, the opposite of scarcity.
• D. Supply of resources is greater than its demand. Wrong. This describes a surplus, not a shortage.

Answer: B

Exam tip: Remember that scarcity = limited resources versus unlimited wants. If an option says resources are in excess or supply exceeds demand, it describes a surplus, so eliminate it. Scarcity always points to a shortage: wants or demand are greater than supply.