Not everyone gets into college. What type of scarcity causes this? In your answer, discuss each type of scarcity: supply, demand, and structural.
a
College admission is demand-induced scarcity because the number of people that want to go to college rises as the population increases. It is not structural scarcity since it is not a limited natural resource. It is not a supply-based scarcity since the number of colleges is growing, not dropping.
b
College admission is a supply-induced scarcity because there is not a large enough supply of colleges to accommodate everyone. It is not structural scarcity since it is not a limited natural resource. It is not a demand-based scarcity since the demand remains constant throughout the years.
c
College admission is structural scarcity because not enough physical college campuses have been built. It is not a supply-based scarcity since the supply is not dropping. It is not a demand based scarcity since the demand remains constant throughout the years.
d
College admission is a supply-induced scarcity because the number of people that can get into college is lower than the demand. It is not a demand-based scarcity since the demand remains constant throughout the years. It is not a structural scarcity since more colleges can be built.
Out of the given options, the most appropriate answer would be (a) College admission is demand-induced scarcity because the number of people that want to go to college rises as the population increases.
Explanation:
Scarcity is a basic economic problem that arises when unlimited human wants and needs exceed the limited resources available to satisfy them. Scarcity can be classified into three types based on the source of the problem: supply, demand, and structural.
Supply-induced scarcity occurs when the supply of a resource is limited, and it cannot meet the demand. Demand-induced scarcity arises when the demand for a resource exceeds its supply. Structural scarcity is a systemic problem that arises due to the organization of society, technology, or other factors.
In the case of college admission, it is a type of scarcity that occurs due to the high demand for college education. College admission is a demand-induced scarcity because more and more people want to go to college as the population increases, but the supply of seats available in colleges remains limited. However, it is not a structural scarcity because the problem does not arise due to the organization of society. It is not a supply-based scarcity, as the number of colleges is growing, not dropping.
Hence, option (a) is the correct answer.