ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What is Scarcity? Scarcity, also known as paucity, is an economics term used to refer to a gap between availability of limited resources and the theoretical needs of people for such resources.

Detailed explanation-2: -Natural resources like gold, oil, silver and other fossil fuels are naturally rare. When demand exceeds the supply, these resources become scarce and prices can go up. Other commodities, like diamonds, command a high price because of their limited availability and control of their market.

Detailed explanation-3: -Scarcity is the condition of having to choose among alternatives. A scarce good is one for which the choice of one alternative requires that another be given up. Consider a parcel of land. The parcel presents us with several alternative uses. We could build a house on it.

Detailed explanation-4: -Scarcity refers to the finite nature and availability of resources while choice refers to people’s decisions about sharing and using those resources. The problem of scarcity and choice lies at the very heart of economics, which is the study of how individuals and society choose to allocate scarce resources.