If the price of a good has risen over time,
A)it must have become more scarce.
B)it must have become less scarce.
C)it has become more scarce only if the price adjusted for inflation has risen.
D)it has become less scarce only if the price adjusted for inflation has risen.

Question

Quizplus · Accepted Answer

The fact that the price of a good has risen does not necessarily mean that it has become more scarce. It could also be due to an increase in demand or a decrease in supply. However, if we adjust the price for inflation, we can determine if the price increase is due to scarcity or not. If the price adjusted for inflation has also risen, then it is likely that the good has become more scarce over time. Therefore, option C is the correct answer.

If the Price of a Good Has Risen Over Time