The environment is a scarce resource
The environment — things like clean air, fresh water, and forests — exists in limited supply. Humans cannot use it without limit, so it counts as a scarce economic resource.
Real World
The Aral Sea in Central Asia was once the world's fourth-largest lake; Soviet irrigation schemes diverted its rivers so heavily for cotton farming that by 2014 it had shrunk to 10% of its original size, destroying the fishing industry and local climate.
Exam Focus
When asked to 'explain', always state that finite supply relative to unlimited demand defines scarcity — don't just say resources 'run out'.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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