Which of the following best describes scarcity in relation to value?

Scarcity refers to the limited availability of a resource or good relative to the demand for that good. In the context of value, scarcity plays a critical role because it implies that a good is not easily obtainable and that there is a high demand for it. When a good is scarce, it often becomes more valuable because there are fewer units available to meet consumer desire.

The correct answer emphasizes that a good must require effort to obtain and be in short supply for it to have value. This highlights the relationship between scarcity and value—when a resource is scarce, obtaining it may involve more effort, which can enhance its perceived worth. This concept is foundational in economics, as it underscores the idea that the interaction between supply and demand directly influences a good’s value.

In contrast, if a good is abundant and easily accessible, it is typically less valued, because the effort needed to acquire it is minimal, resulting in lower demand. Therefore, scarcity, defined by limited availability combined with the necessity for effort in acquisition, is vital in understanding how value is established in economic terms.