ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Scarcity is important for understanding how goods and services are valued. Things that are scarce, like gold, diamonds, or certain kinds of knowledge, are more valuable for being scarce because sellers of these goods and services can set higher prices.

Detailed explanation-2: -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-3: -Scarcity pricing is subject to the scarcity principle, which states that the good’s price will increase until its supply and demand reach equilibrium.

Detailed explanation-4: -True. Scarcity means that there is less of a good or resource available than people wish to have. Any product that is limited in supply, then it becomes scarce and, in most cases, it bears a lot of real value. The demand exceeds supply resulting in scarcity, and unsatisfied human wants.