1) The definition of scarcity is that it “means that society has limited resources and therefore cannot produce all the goods and services people wish to have.” Scarcity forces individuals and governments to make trade-offs between one good thing and another because it is impossible to obtain all goods that are seen as desirable, and because of the fact that scarcity exists, products and services with equal scarcity are exchanged. 2) This statement is valid given the very meaning of scarce resources is that there is a limited amount. One example is the “guns and butter” trade off, which means that society can use their funds on guns (national defense) to protect itself, but then there will be less of the scarce financial resources to spend on butter (consumer goods). Another example is the trade-off between protect the environment and having a high level of income. Laws which regulate pollution increase the cost of manufacturing goods and services thus leading to a chain reaction resulting in higher costs of goods, lower wages and smaller profits. 3) This statement is false because there are always trade-offs, even when services cost no money, there are still negative repercussions for such actions. If the government used all of its funding for goods like health care and education, there would be no more resources remaining for other projects. Additionally, if the government provided these goods for free, there would no longer be incentive to work hard to pay for them and the quality of those services would decline as well. 4) Efficiency is the way by which “society is getting the maximum benefits from its scarce resources” and equality is that “those benefits are distributed uniformly among society’s members.” If the U.S. government were to redistribute income from the rich to the poor, it would increase equality but severely decrease efficiency