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: -Resource scarcity occurs when demand for a natural resource is greater than the available supply – leading to a decline in the stock of available resources. This can lead to unsustainable growth and a rise in inequality as prices rise making the resource less affordable for those who are least well-off.

Detailed explanation-3: -Scarcity exists when there is not enough resources to satisfy human wants. One of the most widely known examples of resource scarcity impacting the United States is that of oil.

Detailed explanation-4: -As the resources get scarce in nature and the alternate of that resource is either not available or has a very high switching cost then, need and wants of that particular resource increase dramatically. Such a situation forces consumers to effectively allocate resources for satisfying their basic needs.