ECONOMICS
SCARCITY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Make production decisions
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Conserve resources
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Limit resource use
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Charge large amount of money for available resources
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Detailed explanation-1: -Individuals and societies are forced to make choices because most resources are scarce. Economics is the study of how individuals and societies choose to allocate scarce resources, why they choose to allocate them that way, and the consequences of those decisions.
Detailed explanation-2: -There is always scarcity, because human wants are unlimited. This then brings use to a third important idea: Because of scarcity we MUST MAKE CHOICES. Some economists call this the “economizing problem". We can’t have everything that we want so we have to choose.
Detailed explanation-3: -Scarcity exists because we have limited resources and unlimited wants. No society has ever had enough resources to produce all the goods and services its members wanted. Because of scarcity, all decisions involve costs.
Detailed explanation-4: -Scarcity affects methods of production by contributing important information for which methods will be utilized. It can also result in innovations. For example, when machinery is scarce, people may instead revert to more basic methods of production.
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?