ECONOMICS
SCARCITY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When will products be produced?
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How will products be produced?
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What products will be produced?
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Who will gets access to the resources and the products they produce?
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Detailed explanation-1: -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-2: -While most resources and goods are scarce, some are not-for example, the air that we breathe. A resource or good that is not scarce, even when its price is zero, is called a free resource or good.
Detailed explanation-3: -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-4: -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.