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 of resources’ implies that there are unlimited wants to be fulfilled by limited resources. The basic concern of an economy is to allocate the scarce resources to the best possible use in the face of unlimited wants. Thus, the problem of scarcity forces an economy to make a choice among various alternatives.

Detailed explanation-3: -Resources are limited in nature. Unlimited wants and limited resources give rise to the problem of scarcity. Scarcity is referred to as a shortage of resources to meet the infinite human wants. The problem of scarcity gives rise to choices.

Detailed explanation-4: -Resources are scarce because we live in a world in which humans’ wants are infinite but the land, labor, and capital required to satisfy those wants are limited. This conflict between society’s unlimited wants and our limited resources means choices must be made when deciding how to allocate scarce resources.

Detailed explanation-5: -Scarcity is the concept that resources are only available in limited supply, whereas society’s demand for those resources is essentially unlimited.