Scarcity limits university enrollment capacity

Steps:

• Recognize the university faces excess demand from qualified applicants but rejects some due to resource constraints.
• Recall factors of production: land (physical space), labor (faculty/staff), capital (equipment/facilities), enterprise (organization/innovation).
• Analyze the decision: Rejection stems from inability to accommodate more students, tied to limited inputs.
• Identify labor as key: Universities are often constrained by teaching staff availability, not other factors.

Why B is correct:

• Scarcity of labor means limited faculty to teach additional students, per the economic principle that production is bounded by factor availability (output = f(land, labor, capital, enterprise)).

Why the others are wrong:

• A: Infinite capital would fund expansions like new buildings, enabling more acceptances.
• C: Scarcity of land could limit space but isn't the primary constraint here; labor binds teaching capacity.
• D: Unlimited enterprise would drive efficient growth and innovation to accept more applicants.

Final answer: B