ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -Economics is the study of how a society uses scarce resources to produce and distribute goods and services. The resources of a person, a firm, or a nation are limited. Hence, economics is the study of choices – what people, firms, or nations choose from among the available resources.

Detailed explanation-3: -All societies face scarcity because all have unlimited wants and needs with limited resources. What basic choices are faced by all societies? Each society must decide what to produce, how to produce it, and for whom to produce it.

Detailed explanation-4: -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.