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: -Define scarcity as a basic condition that exists when unlimited wants exceed limited productive resources.

Detailed explanation-3: -Scarce resources refers to the resources which are limited in quantity and have alternative uses in production of various commodities. So the problem of these scarce resources is reflected in the aggregate supply of the economy which is also limited owing to limited source of inputs.

Detailed explanation-4: -Scarcity falls into three distinctive categories: demand-induced, supply-induced, and structural.

Detailed explanation-5: -Answer: The four basic problems of an economy, which arise from the central problem of scarcity of resources are: What to produce? How to produce? For whom to produce?