ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Scarcity in economics is a term describing finite resources, or the perception of limited resources, when there is not enough to fulfill human needs and wants.

Detailed explanation-2: -Scarcity is one of the key concepts of economics. It means that the demand for a good or service is greater than the availability of the good or service. Therefore, scarcity can limit the choices available to the consumers who ultimately make up the economy.

Detailed explanation-3: -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.

Detailed explanation-4: -Answer and Explanation: The statement, “Scarcity is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied, ” is False. The statement describes a shortage, which is a temporary condition that can and will be fixed within the price system of a free market.

Detailed explanation-5: -The scarcity principle is an economic theory that explains the price relationship between dynamic supply and demand. According to the scarcity principle, the price of a good, which has low supply and high demand, rises to meet the expected demand.