ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The phrase limited resources means that the quantities of productive resources available to the economy are finite. The economy has a finite amount of labor, capital, land, and entrepreneurship that it can use for production. It might have a lot of those resources, but the quantities are NOT infinite.

Detailed explanation-2: -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-3: -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-4: -The biologist Paul Ehrlich is perhaps the most famous proponent of this idea. In his 1968 bestselling book, The Population Bomb, he advanced the idea of resource depletion.

Detailed explanation-5: -It’s time to wrap things up, but before we go, always remember that the four factors of production-land, labor, capital, and entrepreneurship-are scarce resources that form the building blocks of the economy.