Michigan has an abundant supply of fresh water. However, an economist would consider it a scarce resource because:

c. water is limited relative to people's unlimited wants

The Scarcity occurs when resources are limited and people have unlimited wants. We know that day by day fresh water is depleting from the earth and it is becoming scarce and people have unending needs for water.

As water is not used for only a few purposes, it is used for various purposes like drinking, bathing, washing various things, cooking, manufacturing, agriculture purposes, generating electricity, boating, swimming. So we can see how many uses of water is there, you can count more yourself.

This unlimited used with the limited amount of water makes it scarce.