ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -One of the defining features of economics is scarcity, which deals with how people satisfy unlimited wants and needs with limited resources. Scarcity affects the monetary value people place on goods and services and how governments and private firms decide to distribute resources.

Detailed explanation-2: -Scarcity occurs when there are limited quantities of resources to meet unlimited needs or desires. Shortages occur when producers will not or cannot offer goods or services at current prices.

Detailed explanation-3: -Answer and Explanation: The statement, “Scarcity is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied, ” is False. The statement describes a shortage, which is a temporary condition that can and will be fixed within the price system of a free market.

Detailed explanation-4: -Scarcity exists because we have limited resources and unlimited wants. No society has ever had enough resources to produce all the goods and services its members wanted. Because of scarcity, all decisions involve costs.