What term refers to the idea that society has limited resources and therefore cannot produce all the goods and services people wish to have?

The correct answer is scarcity. 

Scarcity refers to when certain goods or resources are not able to be produced in a quantity that is sufficient enough to meet people's demands.For instance, let's assume that every summer, a certain state's  markets sell mangoes that are high in demand by customers. However, one year, most mango trees are unable to yield mangoes due to unfavorable weather. Due to this only very few mangoes are sold to customers and there are not enough to meet customers' demands. This means that there is a scarcity of mangoes.  

The answer should be b