ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Scarcity is the basic economic problem. It arises from the insufficiency of resources to satisfy people’s wants. Scarcity is ubiquitous. Rich people face scarcity when they want more than they can buy, when they can’t be in two places at once, and when, accordingly, they must choose among alternatives.

Detailed explanation-2: -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-3: -Individuals, businesses, governments, and countries all face scarcity. Goods, services and money can all be scarce, but that scarcity is caused by the scarcity of underlying resources. Anything that is desirable, has multiple uses, and is limited is considered scarce.

Detailed explanation-4: -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.