ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -Scarcity falls into three distinctive categories: demand-induced, supply-induced, and structural.

Detailed explanation-3: -In economics, the concept of scarcity conveys the opportunity cost of allocating limited resources. Scarce goods are those for which demand would exceed supply if they were free. Common resources like clean air and a sustainable climate have been increasingly recognized as scarce goods with costs as well as value.

Detailed explanation-4: -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-5: -It’s time to wrap things up, but before we go, always remember that the four factors of production-land, labor, capital, and entrepreneurship-are scarce resources that form the building blocks of the economy.