ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -Demand-induced scarcity reflecting rising demand. Supply-induced scarcity caused by diminished supply. Structural scarcity attributable to mismanagement or inequality.

Detailed explanation-3: -Scarcity explains the basic economic problem that the world has limited-or scarce-resources to meet seemingly unlimited wants, and this reality forces people to make decisions about how to allocate resources in the most efficient way.

Detailed explanation-4: -Scarcity forces us to make choices because we do not have enough resources to produce all the goods/services in the amounts that are desired so people must choose which goods/services we value more.