ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Scarcity forces all of us to make choices by making us decide which options are most important to us. The principle of scarcity states that there are limited goods and services for unlimited wants. Thus, people need to make choices in order to satisfy the wants that are most important to them.

Detailed explanation-2: -Where there is scarcity, choices must be made! Scarcity refers to the finite nature and availability of resources while choice refers to people’s decisions about sharing and using those resources.

Detailed explanation-3: -Scarcity is one of the key concepts of economics. It means that the demand for a good or service is greater than the availability of the good or service. Therefore, scarcity can limit the choices available to the consumers who ultimately make up the economy.

Detailed explanation-4: -The scarcity of resources forces everyone in an economy to make choices. This is because scarce resources mean that no person, firm, or country can have everything. Choices have to be made. For example, a country may have to decide which land to use for manufacturing and which for agriculture as land is limited.

Detailed explanation-5: -Demand-induced scarcity reflecting rising demand. Supply-induced scarcity caused by diminished supply. Structural scarcity attributable to mismanagement or inequality.