What economic issue does scarcity refer to?

Scarcity refers to the fundamental economic issue of having seemingly unlimited human wants in a world of limited resources. It highlights the reality that resources, such as time, money, and materials, are finite, while human desires for goods and services are infinite. This disparity creates a need for individuals and societies to make choices about how to allocate their limited resources effectively.

Option B captures this concept accurately by emphasizing the balance between wants and limited resources. It implies that individuals and societies must prioritize their needs and make decisions about which wants to satisfy first, as they simply cannot fulfill every desire due to the constraints on available resources. This understanding is central to economic theory and decision-making, illustrating why scarcity is often referred to as the basic problem of economics.