Which categories of goods used by ordinary people are most affected by scarcity Use examples from two of these categories and explain how the scarcity of these goods might arise and how this scarcity?

Answer 1

Scarcity often affects essential goods and services, particularly food and housing. For example, in the food category, a drought can reduce crop yields, leading to higher prices and limited availability of staple items like wheat and rice. Similarly, in the housing market, increased demand combined with limited land for development can drive up prices and create shortages of affordable housing. This scarcity can lead to increased competition among consumers, ultimately forcing lower-income families to spend a larger portion of their income on these necessities.