ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Individuals and societies are forced to make choices because most resources are scarce. Economics is the study of how individuals and societies choose to allocate scarce resources, why they choose to allocate them that way, and the consequences of those decisions.

Detailed explanation-2: -Why do people need to make choices? The answer, very simply, is that choices need to be made because there isn’t an unlimited amount of resources for people to do whatever they want to do. The concept that unlimited human wants for goods, services, and resources is greater than the supply available, is called scarcity.

Detailed explanation-3: -Since resources are limited, people must make choices related to goods and services. Scarcity is the condition of not being able to have all of the goods and services one wants because wants exceed what can be made from all available resources at any given time.

Detailed explanation-4: -What is Scarcity? Scarcity, also known as paucity, is an economics term used to refer to a gap between availability of limited resources and the theoretical needs of people for such resources.

Detailed explanation-5: -Societies can deal with scarcity by increasing supply. The more goods and services available to all, the less scarcity there will be. Of course, increasing supply comes with limitations, such as production capacity, land available for use, time, and so on. Another way to deal with scarcity is by reducing demand.