A small town has a limited budget for public services. The town council must decide how to allocate funds between improving the local park, repairing roads, and funding a new library. Considering the concept of scarcity, which option best reflects an appropriate economic decision-making process in this scenario?

In economics, scarcity means that there are limited resources to meet unlimited wants. In this scenario, the town council has to decide how to spend a limited budget among three important services: the park, roads, and a library. To make a good decision, they should think about which option will provide the most benefit to the community. For example, if the roads are in bad shape, fixing them might prevent accidents and make travel easier for everyone, which could be more urgent than improving the park or building a new library. By prioritizing needs based on their impact, the council can make a choice that helps the most people with the resources they have.