In the context of understanding scarcity, which scenario best illustrates the trade-off between resource allocation and demand management through economic policy?

Scarcity means that resources are limited while our wants and needs are unlimited. A good example of this is when a government has to decide how to spend its budget. If it chooses to spend more money on building new schools, there might be less money available for healthcare. This situation shows the trade-off between allocating resources to one area while managing the demands of another. By understanding scarcity, we see that every choice has consequences, and policymakers must carefully consider how to balance these needs for the best outcome for everyone.