In economic analysis, scarcity is described as a relative concept rather than an absolute one. Which of the following statements best explains this distinction?
Scarcity only arises when a nation experiences an absolute physical shortage of basic agricultural commodities, such as during a famine.
Resources are limited relative to the infinite expansion of human wants, meaning even wealthy societies must make allocation choices.
Economic scarcity is a relative concept because it can be completely eliminated if governments redistribute income and wealth more equitably.
Scarcity only applies to non-renewable natural resources, whereas renewable factors of production are exempt from the basic economic problem.
