ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -False, the scarcity of resources arises in all countries, whether rich or poor. In economics, scarcity alludes to when a resource’s demand is more prominent than the stockpile of the resource and the resources available are limited.

Detailed explanation-2: -Scarcity of resources is a universal phenomenon. It is a fundamental central problem of any economy. Rich as well as poor countries have to address this central problem in the economy.

Detailed explanation-3: -Scarcity is the basic economic problem. It arises from the insufficiency of resources to satisfy people’s wants. Scarcity is ubiquitous. Rich people face scarcity when they want more than they can buy, when they can’t be in two places at once, and when, accordingly, they must choose among alternatives.

Detailed explanation-4: -Scarcity involves making choices. Scarcity means individuals, businesses and governments have to deal with the problem of unlimited wants, but limited resources. Every economic system, from capitalism to socialism, has to deal with the problem of scarcity whereby the demand is greater than the supply.

Detailed explanation-5: -Mullainathan explains that scarcity of financial resources affects the poor as they cannot afford to waste a dime never less shell out wads of cash to splurge on non-essential wants. The working poor are constantly trying to stretch their dollar so they can scrape by and fit the bare necessities in their tight budgets.